A Nonprofit is a Business
with Alan Harrison
Alan Harrison is a nonprofit executive with over 25 years of for-profit and nonprofit experience in a diverse set of roles. Born in Pennsylvania, Harrison holds a B.S. degree in Biology from Geneva College and an M.S. degree in Biology (specializing in Ecology) from Lehigh University.
There is a pervading view that nonprofits are somehow less serious than for-profits. I have run across this several times in many situations. Some people think that somehow the money just rolls in and work is a big party every day. There is also a view that everyone works for a pittance and you couldn’t really support yourself or a family working for a nonprofit. These views could not be further from the truth.
After many years of experience in nonprofit I have learned that a nonprofit is a business, just a different kind of business. For-profit businesses make goods or services in pursuit of money for shareholders or owners. This is the “profit” piece. Nonprofit businesses also make goods or services. The difference is that the nonprofit business is not in it to make money for an owner or shareholder, they are there to make good of some sort for a group of people that will benefit from the good or service. In simplified terms I like to think of nonprofits as business that make good not money.
Nonprofits businesses are not a party. Everyone who works at a nonprofit goes to work every day and works just like anyone else. If you do your job you keep it and succeed, if you don’t do it you get disciplined and eventually lose it. Nonprofit businesses have all the same functions as for-profit businesses. There are finance, HR and IT people. Someone cleans the offices and takes out the trash. Any function you can associate with a for-profit business is there with a nonprofit business. It may look a little different, but it is there. The fundraisers are analogous to the sales people in a for-profit business.
Read the Interview Transcript
Hugh Ballou: Welcome to The Nonprofit Exchange. It’s Hugh Ballou and Russell Dennis. It’s kind of an interesting day here in central western Virginia. We’re expecting some snow tonight and a storm on the weekend. How is it in the Rocky Mountain high of Colorado?
Russell Dennis: Well, it’s actually sunny today. It’s a bit chilly, but it’s very sunny. We’re just going through a typical Colorado winter. I don’t worry about it. If I don’t like it, it will be different in five or ten minutes.
Hugh: It may make people feel cool because they might be listening to this podcast in the heat of summer. Think about how cool it is. I got a little hair standing up here. Russell, you don’t have that problem. You can’t see him on the podcast, but he’s a smart man – he doesn’t waste any energy growing hair.
Russell: I haven’t had a bad hair day in a long time.
Hugh: I’m thinking you haven’t had a bad day. It’s always a good day with Russell David Dennis. We have a person who is in the space of philosophy and practice that we are, Russell. It’s Alan Harrison. We met on LinkedIn and had some conversations. He said he’d like to share his wisdom with nonprofit leaders. Alan, welcome to The Nonprofit Exchange.
Alan Harrison: Thank you, Hugh, and thank you, Russell for having me here. I’m very excited to be here and looking forward to today.
Hugh: Tell people a little bit about who Alan Harrison is.
Alan: I’ve been in the nonprofit space for over 15 years now. Before that, I was in the for-profit space for almost that long. I spent a lot of time in the water treatment industry. I have a Masters degree in biology. Toward the end of that part of my career, I wanted to make a change and moved into the nonprofit space. I moved from technology into operations. Most of my nonprofit career has been spent in administration, HR. I have been vice president of administration. I have been CEO of a small nonprofit, running things from an administrative and financial standpoint as opposed to technology. That was a big change for me, but I have never looked back. I enjoy it and really love the nonprofit space.
Hugh: We are talking about good sound business principles today. You’ve come from the business world. We use the funny terms “for-profit” and “nonprofit.” Right there is where we set up a false premise with the word “nonprofit.” We have had guests who talk about it being a social benefit or a tax-exempt charity. One guest gave us the title “for-purpose” organization.
You and I spoke a little bit last week. You’re very passionate about the principles that you teach and bring to this tax-exempt world of charities that are really cause-based. We’re working to improve people’s lives. The bottom line is ROL, Return on Life, the impact that we have in people’s lives. Let’s start from why do you think it’s important that these kinds of organizations, which we will use the word “nonprofit” because that is the sector we’re talking to—we’re talking to clergy, leaders of associations that are tax-exempt like a chamber of commerce, or cause-based community nonprofits, all over. Why is it important for us as leaders in this sector to understand business principles?
Alan: The first point that I would make is that a nonprofit is a business. I like the term “not for profit” because we can make a profit. There is nothing wrong with making money. Certainly we raise money. Nonprofits offer goods and services, and they charge for those things. There is nothing wrong with that. The difference is that they take that profit not to make money; they take that profit to make good. There is a principle they are trying to advance, whether that is feeding people who are hungry, trying to make people healthy, global health, or just the health clinic in your local community. It doesn’t matter. They are taking that money, whether it’s a profit or a donation, and using it to make good in that community. The reason we need to keep business principles in mind is because it is a business. All the things that a business does, a nonprofit does. We have finance people, and administrators. We sign contracts. We have buildings we need to upkeep. We have employees. We have HR departments. Everything that a business does, a nonprofit has to do as well. You might say they don’t have sales, but they really do. Fundraisers are analogous to sales. Every function you find in a business or a nonprofit you would find in the opposite organization.
Hugh: We set ourselves up for failure when we minimize those things you just talked about. We expect it’s going to happen. Even at the detriment, we say we can’t make a profit, or we can’t charge too much money for that, or we have to dumb down. What are some of the scripts people tell themselves and others that make some of those things you talked about difficult?
Alan: First off, when you talk to people about a nonprofit, they think somehow the money just comes. One of the biggest errors I see people make in politics and the nonprofit world is they assume that if they do good or the right thing, somebody will support that. That’s not the case anymore. There was a time a lot of years ago where you could go to a donor and say, “Hey, I’m doing really great work. You need to support what I’m doing.” The donor would say,
“You are doing good work. I do want to support what you’re doing.” It’s not that way anymore. We’re well past that. We are in a time where it’s an exchange of value. Just like if I buy a pair of pants from a clothier near me, I want to give him money. That is the value he gets; the value I get is a nice pair of pants. It’s no different for a nonprofit. If I am going to a donor, I need to explain to them the value proposition: what they are getting for the dollars they are giving to me. It may be marketing. It may be publicity. It may be something that encourages their employees because employees are interested in social enterprises and organizations that make a difference. Whatever that value proposition is, I need to go to my donors with. A lot of people don’t realize that. They think if they are doing a good thing, they will give me money. The great nonprofits, the ones that are really successful, understand that.
Hugh: Those in business build a strategy. At least, some of them do. At SynerVision, we consider the strategy to be central. As you know, I’m a musical conductor. If we don’t have a musical score, nobody knows what to play. We go into our space with all our volunteers and board members and staff and say, “Go,” and they don’t know where to go. There is a lack of understanding where they can be engaged and what they are supposed to do. Part of that is understanding what our brand is and what our unique value proposition is. You just spoke about value propositions when you are making a presentation. I don’t think we’re very good at either defining it or expressing it. What do you say about how we get there?
Alan: You mentioned brand, which is important for a nonprofit. As a nonprofit, you have your reputation and your brand. People need to be crystal clear on what that brand is. When you think of a good nonprofit, the Nature Conservancys, and the CAREs, and the American Cancer Society, people know what those organizations are about. They know exactly what the American Cancer Society is. They know exactly what CARE does. They understand that brand identity. Those organizations understand their brand identity is what is out there. It’s no different than Google. People know Google’s brand identity and Microsoft’s brand identity. It’s the same kind of an idea. It needs to be marketed the same way as those organizations would.
One thing I always recommend to a nonprofit is get your values. Know what your values are. Understand what they are. Put them first and foremost on your webpage. If you go to the really successful organizations, one of the first things you will see on their webpages is what their values are. Lead with those values. Lead with that brand. Lead with that understanding. That is what a lot of nonprofits don’t do. They don’t have a 30-second elevator speech where they can distill their brand down into a few short sentences that make people go, “Oh, I’ll get that.” That will allow you to understand whether you can connect with that person. Some people won’t be interested in what your mission is, and that’s fine. But it will allow you to connect with those who are interested in your mission and find out who those people are pretty quickly into the conversation. You don’t want to spend six months or a year cultivating a donor who really isn’t interested in your mission. You want someone who will be clued into what you’re doing.
Hugh: Russell, that’s one of the messages you bring up very often with board members and donors. Find out what they’re interested in. Do you want to chime in and come up with another question for him?
Russell: Everyone has a different motivation. When you’re talking about value, which is a word that is rarely used in nonprofit circles, the value is in the mind of the supporter. You’re going to be talking to multiple audiences. You have a message for volunteers. You have a message for donors. You have a message for people in the community.
Really what we’re talking about is profit. With nonprofits, there is a profit. There is a social profit. There is a monetary profit. The discussion that Alan started with values, that is very important because when you look at where it is that you see yourself fitting, where you want people to go as a result of being exposed to your services and products, what is it that you ultimately want them to have? What is the experience they’re going to get? You almost have to set the table for your own measures in a sense by explaining where people start and where they end up. That is something that you measure. Everything doesn’t fit in a pivot table. There is a place for where Berny calls the dolphin story and the results. People want results. Donors are very sophisticated now. Are you delivering results? What do those results look like? As a business, it’s really important to run a business like a business. It’s about good stewardship. Alan is kind of like me. You had a different career, and then you transitioned into this career. What would you say was the biggest surprise when you got when you moved out of your old career into the nonprofit space? What was the one thing that was the biggest shock to you?
Alan: I think for me, when I moved from the for-profit to the nonprofit world, I remember I was moving into the Nature Conservancy. Someone there called my old boss and said, “Can Alan do this job?” He said, “Of course he can. It’s an NGO.” That’s what surprised me. I have never been anywhere where people work harder or where people were more talented than the nonprofits I work in. People have this view that it’s kind of a party or money somehow comes rolling in or we don’t really work; we just lay around all day. That to me was the biggest surprise.
When I went to the CDC Foundation, it was during the ebola crisis in Africa. I have never seen people more dedicated, work harder, more talented, than anywhere I have been in my life. This idea that people aren’t working or people don’t work hard really was a surprise to me. I was taken aback. I have become a nonprofit evangelist when I talk to people. We have analogous to sales. We have finance. We have HR. We have IT. Every function you can think of, people are working hard. You have to do your job just like anywhere else. If you don’t do your job, you lose your job. There is this view that somehow it’s not serious.
Hugh: What Russell and I do as a resource for leadership and strategy and performance, it’s harder in this sector. I served inside the church for 40 years. There is a really good case of dumbing down and not having the standards you’re talking about. It’s the same as any other generic nonprofit, except churches think people will walk in the door. We have lost in the mainline denominations our relevance. I still believe in it. I’m a critic of it to help it. But it’s the mindset that we develop that is a scarcity mindset. With scarcity thinking, the mindset ought to be abundance. God has given you abundance, but you have to be a good steward of it.
The piece that Russell brought in, one of our colleagues, Berny Dohrmann, runs a business growth conference for 25 years. It attracts entrepreneurs. They come in from the business side and the nonprofit side. There are characteristics that are the same. The dolphin thing he was referring to is “Here is my sweet little dolphin,” but there is no substance to your ask. You just are petting your dolphin, and you want everyone else to pet it.
The point you’re making is there is a quantifiable value you bring. Instead of talking about ROI, we talk about ROl, Return on Impact. It’s really bottom line impact. We take your values. We have to be clear on what we value. As we do strategy, we take core values to another level. People write these words that they don’t understand. We develop guiding principles. How do you make decisions based on these concepts? Being a principle-based organization, what we’re now teaching nonprofits is how to develop your strategy and develop the principles. You will take that strategy and integrate it into performance, which is as you probably have experienced is a big gap. We have a lot of well-intended, passionate, dedicated people who are low on the performance scale. Really, these people want to do more. In many circumstances, they work harder here than they do in their day jobs.
Do you want to come back at us with some other thoughts?
Alan: I would agree that people work hard in nonprofits. Some of the people I have talked to who transitioned from for-profits to nonprofits are saying they work harder now than they ever did in the for-profit world. You have to wear a lot of hats. Money is scarce. There is a lot of challenges.
Another challenge for nonprofits you touched on is the impact and measuring the impact. Donors want to hear about impact. That can be a challenge for nonprofit. In a for-profit, you can look at your balance sheet and your P&L sheet for the quarter. You can say you sold 27,000 widgets. I made this kind of gross margin and net profit. It’s fairly simple. But for a nonprofit, if you are a single cause nonprofit, you feed hungry families for example, or you feed homeless people, you have one number to work with. But a lot of nonprofits do multiple things. It becomes extremely challenging to measure impact. I have been in nonprofits that had up to 80 or 100 active projects. How do you measure impact across 100 active projects? That becomes difficult. You start to focus on ones that are most important or most impactful. There is no question that you don’t just have a number. We did 27% this year. Our gross margin is 12%. That is not how a nonprofit works. When you look at your impact, you have to break it down by project, by population you serve, by the areas you serve. It’s a huge challenge for a nonprofit.
Russell: I think the place people have to begin at is- I was looking at a book, The Social Profit Handbook by David Grant. A lot of times, when we think of having programs evaluated or people coming in and assessing, we look at it like other people assessing us. The model that we teach at SynerVision and where people bring to is look at how can we do what we’re doing better once we decide what it is that we’re doing. If we don’t make a decision or try to measure what we’re doing, other people will do that for us. The purpose of evaluation is not to get a grade to give a better check. The purpose of evaluating and benchmarking is to get better at what you’re doing, deliver more impact, and find new ways to collect that information so people can understand that value. It’s having the people you’re working with talk about how being affiliated with your organization has made a difference. There is a lot that goes into storytelling. It captures that information that won’t fit neatly on the pivot table that helps us connect with people emotionally that helps define some of that impact. That ROI is return on impact, or return on influence, these types of things. The thought pattern that people have around nonprofits really needs to change. You addressed that very well, Alan: how people seem to think it’s quick and easy. There are a lot of people who are reluctant to write a check because they say, “I’m not interested in paying your rent. I want to make sure every dollar I give you goes into the program.” If you don’t have an infrastructure to deliver it, you don’t have a program. How do we create a shift in that focus with people? What are some things you’ve done to help shift that thinking around?
Alan: I think your point about overhead is important. No one goes to Google and says, “You shouldn’t have a finance department. Those should be all volunteers. You shouldn’t have an IT department. Those all should be volunteers.” You know what you get with volunteers. You have very dedicated people who have little time, and they can’t necessarily put in the time you need them to put in. Just like any other business, you have to pay for what you need.
Imagine a large nonprofit depending on a volunteer CFO. It will be a mess. Or a volunteer IT department. It will be a mess. You have to have a well-oiled, well-run organization. You’re competing in the same talent pool. There is a subset of people who want to be in nonprofit. They love the nonprofit, they love the mission, and I honestly believe the employees who stick around in nonprofits are the ones who love the mission. You’re still competing for the same talent pool. If I need to hire a CFO, that CFO could go to another organization or for-profit. The idea that we shouldn’t be paying for overhead, or whatever that number is, doesn’t make a lot of sense.
The finances need to be transparent. They need to be reasonable. You shouldn’t be spending 90% on overhead obviously. But you have to have enough of a spending to hire people who have families and car payments and house payments and those kinds of things. I think we need to have honest conversations with the foundations, the corporations, and the other donors who seem to have this mindset that this should all be for free. It’s not. They want a good product. They want excellent services to the population that we serve, or the cause that we serve, so they have to understand that comes with a cost. You have to have good people to have a good product. You have to have good people to offer a good service. You have to pay those people so they can live; they have to send their kids to school and pay their car payments.
Russell: The flip side of that is there are some nonprofits who think, “Hey, we’re doing worthy work. Why aren’t people coming? Why won’t they write us a check?” There is that other piece where from the side of the nonprofit, they don’t always understand what people are looking for, what motivates them to support a cause. How do you have that conversation with nonprofit leaders to get them to understand the sort of things that will motivate people to lend that support?
Alan: You touched on it when you talked about value. It’s an exchange of value. There is some value that that donor has to be getting from the nonprofit, whether it’s a demonstration to their employee base that they are making a difference in the world and they are a socially conscious organization, whether it’s a marketing campaign that they can build around the work they’re doing with an organization, whether it’s something that makes them feel good. It doesn’t matter what that value is. What you have to do as a nonprofit is understand what value they’re interested in and determine if you can supply that value. If you can’t supply that value a particular donor is looking for, stop talking to that donor. You’re wasting your time, and you’re wasting their time. Find a different donor that would be interested in the value you offer.
If I sell suits and somebody is not looking for a suit, I probably don’t need to talk to that person, and they probably don’t need to talk to me. It’s the same thing.
Russell: Is there a point where you say a lot of nonprofit leaders hanging on beyond where they probably should simply say ‘Next”? Is it a common problem for nonprofit leaders to continue to try to implement strategies to attract donors that they might just not be the right fit for?
Alan: I think it’s harder for a nonprofit leader to say that. As nonprofit leaders, we care so much about what we do. We care so much about our cause that it’s hard to imagine someone else wouldn’t care about that.
It’s hard to see maybe that someone doesn’t care about that. We’ll keep pushing a value that maybe that other person isn’t interested in. But there is somebody who is interested. Your time is better spent finding that person who is interested.
Hugh: It’s a good match. People have a philanthropic side. They want to volunteer. But really, they don’t want to volunteer for everything. We sometimes talk people into volunteering when they really don’t want to. Then they don’t perform. We blame them when it’s really our fault. We have a vision of what they ought to be interested in instead of having a conversation. That also goes with putting people on boards and putting them in slots, like a treasurer, secretary, communications. We put people in the wrong place.
Going back to what you were saying about the misconceptions, I am not sure if you have seen the TED talk by Dan Pallotta, “The Way We Think About Charity is Dead Wrong.” Have you seen that video?
Alan: I haven’t.
Hugh: Look it up. It’s the stuff you guys were talking about. We think we can’t spend money on marketing. We think we can’t take risks. We lose a few hundred dollars, and people will go insane. Disney has a $200 million flop on a movie or more than that today; that’s just the cost of doing business.
The other one is this overhead thing. It’s a fallacy. You’re paying people. We can’t pay decent salaries. You’re going to give up this big corporate job and work for less money, and we expect you to do the job of three people for a third of the pay. There are some really unreasonable expectations we have. Those are the biggest myths, which are totally wrong in my book. What do you think?
Alan: I agree. I have seen people on boards that clearly weren’t interested. They don’t do anything. Six months later, they resign. It doesn’t make sense. You have to understand what drives that person. You have to take the time. The myth that you can’t spend money or take risks, one of my favorite quotes is from Samuel Johnson, who was one of the Founding Fathers of the country. He said, “If all danger must be removed, then nothing will ever be accomplished.” The idea is that if you reduce the risk to zero, you won’t accomplish anything. That is an absolute fallacy that we can’t have any risk in a nonprofit organization. All risks have to be considered. They have to be logical. You have to have reasons behind them. When things fail, you have to learn from them. I had a boss years ago who said, “Fail faster.” I thought that was crazy until I realized what he was saying was there is going to be failures in life. Accept them when you get to them, move past them, and get on to something else. Things are going to fail. You will try a program that won’t work. You will try to serve a new population that doesn’t work. You have to accept that risk you took in trying to serve that new population isn’t working and get on to something where you really can have an impact.
Hugh: Underneath of what you were talking about, this conversation of embracing good, sound operational principles, they are the same for a for-profit or a not-for-profit organization. But there are some subtle differences that actually we have a lot more regulations in the nonprofit arena. We have to be careful with how money is used. Especially if there is designated gifts. If people give us money for a certain thing. There is a public persona.
You mentioned American Cancer Society, which is a curious organization to me. We are talking about overhead. But they raise tons of money. Only 12% goes to research. That is a classic example of exorbitant salaries and overbenefiting the employees. Every little goes to the end result. However, people look past that somehow and there is a lot of money donated to that organization. There is a persona, a marketing piece that is evidently very strong.
But on the other side, we feel defeated because other organizations are taking all the money. Last time I checked, money is a renewable resource. Part of our thinking, it’s fundamentally, where I’m headed with this, sorry to ramble, underneath this is leadership. Nothing happens without leadership. The organization is the reflection of the leader. There are organizations that do a very good job like American Cancer Society of presenting themselves in marketing, but there are other organizations who probably have 10% overhead and make a lot of impact, but they are vastly compromised by their lack of effective board and lack of revenue. What do you think of leadership as being an anchor for what we’re talking about?
Alan: There is no question that you need a leader who understands that all of these things are important. If you have a leader in a nonprofit who only focuses on providing the service or whatever good the nonprofit is doing and doesn’t get out there and talk about the organization and market the organization, recognize how important branding and marketing is, you are not going to go very far.
Another item that you touched on is accountability. It’s holding people accountable. A lot of people in nonprofits think we need to be nice. I would argue that we do need to be nice and treat people with dignity. But treating people with dignity and being nice to them does not mean not holding them accountable. Accountability is a big piece in nonprofits that can be a challenge because everybody wants to be nice. Sometimes you have to say this person isn’t working out, this project isn’t working out, this department isn’t working out, and make a change. You can do that in a kind way. You can do that in a way that preserves people’s dignity. But if you just let it slide, like I have seen happen, then you get mediocrity. Every organization is as strong as its weakest link. Every chain is as strong as its weakest link. It breathes down the whole organization. I would argue that leaders need to be focused on that accountability that sometimes is an issue in the nonprofit world.
Hugh: We cause some of those problems. We put the wrong person in the wrong place, and then we are nice to them. They’re trying. They are bringing down your culture. They are representing your brand in a negative way. It’s damage control at that point.
Alan: The brand has to come first. The mission has to come first. Everything that you do in the nonprofit has to be focused toward advancing the mission and advancing the brand. You always as a leader need to be asking yourself the question: Does this advance the mission in the best way? Does this advance the brand in the best way? I think a good leader can recognize, this isn’t working. We need to make a change. We brought this person on our board who isn’t interested. I need to have a conversation with that person. It takes some assertiveness and guts, but the leader has to be willing to make those kinds of changes and have those kinds of conversations in an organization. For some reason, they are more timid in nonprofit organizations than people are typically in for-profit organizations because it’s perceived as not being nice.
Hugh: It’s being honest though. We want to be honest with people.
Alan: That’s right.
Hugh: Russell, it’s back to you.
Russell: I think that honesty goes a long way, but honesty without compassion is brutality. It’s all in how you go about putting things out there. As we look at this environment today, there is the realization that business principles are so critical to being effective stewards of things that are entrusted to nonprofits. I think there is a whole lot of confusion, but there are still some very subtle and distinct differences between the nonprofit or social profit and the purely profit entity. What do you see as the most important distinctions to make between the for-profit and the social profit entity?
Alan: It’s obvious that in the for-profit world, you are in it for the profit. You are trying to enrich shareholders. You are trying to enrich management. You are trying to have quarterly profits that increase every quarter. Anybody in the for-profit world is familiar with that. I have been there. We can’t forget what our mission is in a nonprofit. That ‘s the difference.
You talked about having compassion. The nonprofit world is about manifesting that compassion in the larger world. That is really what we’re trying to do. We’re trying to take that compassion we have and manifest it in the larger world. I would argue that while we can learn from the for-profit, the for-profit can also learn from us. That compassion for employees, for the larger world, that goes a long way. I always use the word “dignity.” I think we need to treat people in a way that preserves their dignity, in a way that doesn’t threaten their dignity as a person. I think that the for-profit world would learn from a lot in some places. I would never say that all for-profits don’t treat people with dignity. But it’s much more common in that world. I think they would learn a lot from what nonprofits do in terms of treating people with compassion and dignity.
Russell: Where do you think that you see more of a collaborative type of leadership? Another question I would ask is do you see some pathways to create more collaboration in both worlds? We are in a society today where people are really getting locked into their differences. I think we are suffering from it. How can collaboration as a way of life in both types of entities help us with our larger conversations with how we approach each other as people?
Alan: I think nonprofits and for-profits should be collaborating with each other. One thing I like about the millennial generation is they really want to make a difference in the world. They have a lot of passion for recognizing what is wrong with the world, and wanting to make a difference. That becomes important just to have a work force in the for-profit world. As nonprofits, we can bring them opportunities to engage their employees in causes that are important to them, whether that is environmental things, whether it’s feeding the homeless, those sorts of things. We can give them direct volunteer opportunities. UPS has a goal to have 20 million hours of nonprofit volunteer time with their employees. Nonprofits need to step up and talk to all the organizations out there about the kind of opportunities we can offer them to engage their employees. In those kinds of volunteer efforts. Those things go a long way for both organizations. The nonprofit gets exposure and marketing. People come away saying, “Wow, this is great. I got to do this or do that.” The for-profit gets an engaged work force that says, “I work for a great company. They let me take a day off and go plant trees for this tree planting organization, or go feed people in the soup kitchen that didn’t have anything to eat that day.” I think those kinds of collaborations, which happen but probably don’t happen nearly as much as they should.
Russell: If you get somebody that comes out of university, it was a little bit different when the three of us attended, but now you are looking at a situation where somebody comes out, particularly if they have done any graduate work, they have this massive debt that they have to deal with. You have career opportunities and private enterprise that are driven by stock prices. How would you make a case to get somebody who is very talented to choose a career in the social profit field knowing they are leaving all of these other things on the table, and they have this debt? How do you make a case that it’s really worthwhile to go into the nonprofit sector?
Hugh: One thing I noticed with people who are coming out of university now is they don’t expect to work for the same company for 25 or 30 or 40 years and retire from that company. A lot of people in the millennial generation go into a job knowing I want to be here for two or three years. I want this to be a resume-builder. I want this to be a skill-builder. I want this to be an opportunity. Then I am going off to the next thing. I think as nonprofits, we have to accept that, not try to change it, not try to talk people into working somewhere for 30 years, but go into talking to them about what this opportunity is. This is an opportunity to build your resume, this is an opportunity to wear a lot of hats and gain a bunch of skills, this is an opportunity to be exposed to donors, some of whom are people you may want to work for someday. If we go into it with the idea that we understand what these people want, we understand what this particular market or employee wants, and offer them that, then you’re going to get more people saying, “I could go there for three years. That would be awesome to work with these big companies who are their donors and have volunteers. Then I can go onto the next thing.” I think accepting that approach of how they want to live their lives, they will be more interested in talking to us.
Hugh: There is a lot of comments in this interview about money. I find the common perception is nonprofit leaders say, “If we just had the money, we could do more.” I come back with, “Can we see your strategy?” “I don’t have one.” “How do you define the board’s engagement on a scale of 1-10?” I get a 4.5. That’s the reason you don’t have money. If you had money, you probably wouldn’t get the results you want. Do you experience that as a definition of what is missing? Do you have a different take on what they need to do to earn it or attract it?
Alan: I certainly agree with you that money is not the be all end all. An organization needs to be in a position to effectively use any money they get. If you have a board that is engaged at a 4, you’re right. I serve on a board, and it’s an extremely engaged board. The organization is doing very well financially. That is because the board is engaged, and the organization recognizes they need to do marketing and branding, and they need to measure impact, and they need to do all of the things that are important. It comes back to those principles. You have to be willing to accept things just won’t come rolling in. You will have to work for it. You will have to understand your audience. Pick the right audience. Execute. And demonstrate you have executed. It’s no different than a for-profit business in that way. There are a lot of differences about what we do and what we’re trying to accomplish. In terms of execution, there are a lot of similarities there.
Hugh: Sometimes people get excited when I talk about team execution. They think they are going to shoot people.
Alan: Let’s hope not. That’s not a good nonprofit.
Hugh: We do it to ourselves. We bring in people because we have a perception they ought to be doing something rather than what Russell’s vestige is, is find out what they are interested in first. I talked about ROL, return on life. We have a mission. That is our intellectual property. We’re doing this. This is the value we bring. We want to get the money. We have this middle capital. This value capital. We want money capital, financial capital. But in the middle is relationship capital. We don’t invest in that. Part of what businesses do is they are really, the ones who are successful, building relationships with their customers. In our customers in the nonprofit world are our supporters, stakeholders, donors, board members, volunteers. We don’t do a good job of nurturing them, do we?
Alan: No. Some organizations do a very good job of that, but others, again, don’t take the time, like you said, to really understand what they are. You need to meet people where they are, not where you want them to be. You need to be willing to invest the time and effort in really understanding what people are looking for. Then you have to ask yourself the honest question of whether you can give them that. If you can’t, you walk away. It’s not the right fit. I think that because we love what we do so much, we project our love for what we’re doing onto other people. That is a little bit of a pitfall for people in nonprofits.
Hugh: It’s common, isn’t it? That’s a common scenario, isn’t it?
Alan: Yeah, it’s very common. I don’t think it’s any different than any other world. People tend to project their own loves and desires and interests on other people. But when you are running a business, it’s dangerous, and it can be devastating.
Hugh: I want to get one more thing on the table here before I go to the sponsor message. Russell and I serve leaders as an advisor. We don’t customarily use the word “consultant” or “coach” because there is so much gray around what that means. 90% of those people who say they are consultants give us a bad name. We have gone from consulting to insulting to advising. We have a paradigm in SynerVision that is a WayFinder. We partner and have some strategies to guide the process. But our job is to help leaders step up their own game. I find that the people struggling are the ones who want to figure it out for themselves. I find by and large the successful leaders have someone like one of us as an advisor, whatever they call them. Why do you think people are reluctant to pay for somebody to help them learn, help them be accountable, give them a process, connect them in different ways? Why do you think there is a reluctance for people to do that?
Alan: I think there is a little bit of a stigma attached to having a coach. There is some view that if we have to get this guy a coach, there must be something wrong. He’s not doing his job. He’s not performing. My view is that one of the greatest gifts that an organization can offer an employee is coaching, to help them get better on what they do, to help them understand how to get through the challenges they are facing. I think that’s a huge gift an organization can offer an employee, whether it’s a senior executive or a manager, to help them get better at their job. That is a stigma of we had to get this guy a coach, or we had to get this woman a coach, she must not be doing a good job. People will look down at that. I think we have to be very clear that coaching is a positive. Support is a positive. None of us are an island. None of us can completely be effective at everything on our own. Everything has strengths and weaknesses, things they will be good at and not. Giving someone support is a greatest gift an organization can give an employee.
Hugh: That’s a great answer. Russell, what do you think?
Russell: I think having a trusted advisor is getting somebody that is outside of the scope of what you’re doing and not so attached to it that they may have blind spots. I have discovered that for me. When I work with other people, they have what I call a superpower. We can’t always define our superpowers. They are things that each of us do that are so easy for us that we tend to minimize it or blow it off. Or we may not even recognize it. When you talk to people around you and they say, “Oh, you did something,” and they will point out something you did. Having a system in place where you recognize everybody’s superpowers and you recognize one another’s superpowers is very important. Everybody’s working to their strengths that way. It’s honoring that. It’s honoring what you’re good at and having an outside perspective is how you can pull that genius that is right there in house. I find that when I’m working with organizations, they don’t know how much they don’t know. On the flip side of that, they don’t know how much they already know. Having somebody to help them channel all of that genius is valuable. They will get more out of it. Taking that time over the long haul to really get better at what you do and to define what you do and to find the right people to collaborate with, to serve, to have pay for their services, taking that time is critical. If you don’t take that time, you are serving the wrong people or reaching for the wrong people, you burn a lot of energy.
Hugh: Alan, we have laid a lot of themes on the table today for people. You obviously have a lot of wisdom to share, a lot more than we can cover in this limited time. You have a lot of experience. You’re taking some time off for family. You will go for your next venture next year. I’m curious to say where you end up. Whomever gets you will be lucky because you bring a whole lot of value and wisdom to their organization.
*Sponsor message from Wordsprint*
As we close out this really helpful podcast, Alan, what tip or thought do you want to leave with people before Russell closes us out?
Alan: I think to boil everything down into a 15-second piece is that if you use business principles in a nonprofit and don’t forget the compassion and the mission, you will be successful. You will maximize your chance for success. I hope people can take that away and cogitate on that a bit and apply that to what they do in the nonprofit world.
Russell: Alan Harrison, it has been a joy to sit and speak with you. What is the best way for people to reach you?
Alan: If they find me on LinkedIn and try to send me a connection request, I think that’s probably the best way. I’m active on there. I would certainly love to make some new connections there. I want to thank both of you for today. This has been fun and stimulating for me. I always get my best ideas in conversation with other people who understand the subject. This was rewarding for me, and I hope it was rewarding for others as well.
Russell: This is definitely rewarding work for us. That’s why we do it. If you can’t have any fun at it, why do it?
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