Episode Transcript
[00:00:00] Speaker A: Foreign.
[00:00:03] Speaker B: Welcome to the Rainmaker fundraising podcast, where we bring you tips and insights to help you raise more money for your organization and lead more effectively. I'm your host, Andrew Olson.
[00:00:14] Speaker C: Hey, everyone. Welcome to the Rainmaker fundraising podcast. This is Andrew Olson. I'm here with my really good friend, Alan Clayton. Alan, welcome to the show again.
[00:00:22] Speaker A: Thanks very much, Andrew. Good to see you again.
[00:00:25] Speaker C: Yeah, you as well. And so this is your second time on the show.
We met years ago when you provided some just fantastic training that I to this day think was still probably the best training I've had in 20 years in fundraising.
You are the founder of the firm called Revolutionize. You're also the author of great fundraising organizations. And really that's what I want to talk about today.
Take a minute though, before we get into that and tell us about revolutionizing what it is that you do.
[00:00:58] Speaker A: Okay. Well, Revolutionized. We're a business accelerator for nonprofits, so we intervene or work with our clients to accelerate fundraising growth. As simple as that.
It's basically leadership capacity building to drive sustainable revenue growth and nonprofits.
[00:01:19] Speaker C: Got it. Awesome. So that intersects exactly with. With the book. Then tell us about great fundraising organizations and how and why it came about.
[00:01:29] Speaker A: Okay, so great fundraising organizations, the book is a report on a project that's ultimately taken 12 years to complete.
The first thing we did was we researched, or we got some academic teams to research why some nonprofits successfully grow their fundraising revenue, transformationally grow it, and why some don't, and compared the two that gave us the academic insight into the difference between the two types of organizations. Somewhat similar to what Jim Collins did for the commercial sector. And from good to great.
Once we had that, we then started taking the rough hypothesis of what the difference was laws and doing action research, working with our clients and other organizations around the world to look in more granular detail.
I thought those differences were. And then of course, it was irresistible to start putting together a program of what do you need to do to go from being one of the ones that doesn't grow to one of the ones that do grow.
And that was a multi year project to identify the different behaviors and components that that drove that kind of growth.
You can't claim to have evidenced something until you've seen the results. So we then had to do five years of accelerating organizations, not just to evidence the theory, but actually the financial results over an extended period. And so the book reports on that entire journey.
[00:03:07] Speaker C: Awesome. I want to get into some of those differences, but before we do that, you just said something that yeah, I'm a little bit stunned by and that is that you got organizations to commit to something over a five year period. Because I don't know about you, but I find that in so many charities, if something doesn't immediately return results, it's almost like they shut it down and just stop thinking about it because, oh, I didn't get it in 90 days, so I'm done. How did you gain commitment from organizations to really stick with that for you over time?
[00:03:41] Speaker A: Senior level education.
So the hardest bit in anything is going from nothing to something. That's the hardest step in any.
So what we found was we could spend six months to a year with the organization just getting to the starting point. There would be, you know, communications work, investment work, cultural work to be done. But the first step was always teaching the evidence based insights not just to the senior leaders in the fundraising team, but the senior leadership team across the entire organization, the CEO and ofttimes, the board as well. And with diaries and accessibility, that could take an extended period just to do the education.
But once people, and particularly board members, once they understood fundraising as an investment driven game and it's more than just asking for money, they were then more than prepared to commit for the time period required to see the return.
[00:04:43] Speaker C: That makes sense. Okay, so let's get into some of those key differences that, that make organizations successful versus not. What. What are some of the, what are the biggest two or three that, that you observed in your research and in the work?
[00:04:58] Speaker A: Well, the biggest insight is that a nonprofit is not a single business.
It's two businesses with one mission. There's the business of providing services, which is the business of meeting the needs of service users. And there's the business of fundraising, which is the business of meeting needs of donors. In the organizations that failed, the leadership view was because we're good at serving the needs of our service users, people should just give us money because we're brick.
And that didn't work. I often say to people, try going dating and saying, I'm great, you should date me. It doesn't work.
And it's a good, the relationship analogy is a good one. But actually being better at meeting the needs of the people that are giving, the emotional needs of people that are giving is the starting point of having a better product, which is the starting point. So it does make leadership of a nonprofit very different to leadership of all other types of organizations because you have to have the skills to lead two businesses within one mission. And those two businesses very often can be in cultural conflict with each other.
Second big difference is the investment period that looking at the multi year return for fundraising, there's plenty of courage about that. But the real crux is the ability to work in the emotional space.
So the crux being the hardest part of a climb and the fundraising product and the needs of the donors are emotional and having respect for the emotional needs of people giving money was the key breakthrough moment in every organization.
[00:06:50] Speaker C: So let's, let's go a little deeper on that because I feel like there's a, I don't want to say it's a sort of a whole scale industry wide push, but I hear a lot of organizations and a lot of people inside organizations say things like we want to be about the happy stories, we want to be about the positive outcomes. We don't want to talk about the hard things, the, the suffering that people that we serve on the program side have experienced. We, we don't want to sort of force them to relive those things by us telling their stories. How do we square that with a donor's need for that emotionally relevant engagement?
[00:07:30] Speaker A: Well, you've just got to understand how human beings work.
You know, it's very, very simple. The only reason we have a brain is to solve problems. That's what it's for. It's the only thing that it does. If you don't give people a problem to solve, it's got nothing to do.
It is simple in that. So there's lots of people that say, well, people should behave like this, people should behave like that. But they don't.
So, you know, you can be really blunt.
That kind of opinion comes from a position of just ignorance about how human beings work.
And quite frankly, you know, an arrogance about people should give because we are great education on what human emotions are and how they work is essential. There's a lot of prejudice against emotion.
And we deliberately use the phrase, the two phrases, one is the problem and the solution and the other one is the need emotion and the reward emotion.
So when you hear people with prejudices about emotions talking, they will talk about negative emotions, etc. There's no such thing as a negative emotion. Emotion is just designed to create an action that's, you know, emotion. You know, it means to move out, to move, to make something happen and nothing would happen if we didn't have emotions. So what I say to people that say, well, people shouldn't have these emotional reactions or we should work in this different place, go and study it, go and study what emotions are rather than having an opinion which comes from a place of ignorance. Emotions are beautiful, wonderful things that make us do all the good things that are in humanity.
So having an opinion about how the world should work is not the same on appreciating how wonderful the world does work. So educate yourself.
[00:09:29] Speaker C: Okay, let's talk a little bit about the role of the leader.
I'm sure that you've seen this. I know in a lot of the organizations that I've served over two and a half decades, the person leading the organization often comes from the program side. Right. In my experience, it's been very rare to have a CEO who began as a fundraiser. It's usually, oh, I have a PhD in social work or, or I've got a background in community service and advocacy and things like that. And maybe I've simplified it, but I've often said that person never signed up to be the chief fundraiser. And so that's part of the problem.
They signed up to be the chief program officer and then got elevated because they were successful at that. Right.
How do we take that person who has never been classically trained as a fundraiser and probably feels super uncomfortable with it and, and get them to effectively lead both of those organizations you talk about that actually sit under the organizational umbrella?
[00:10:35] Speaker A: Yeah.
There's two answers to that, Andrew. The, the, the first one is that you do not need to be a fundraiser to lead a fundraising organization. You just.
[00:10:44] Speaker C: Okay, tell, tell me more about that.
[00:10:46] Speaker A: Yeah, you have to. The job of the CEO or the board is to. Well, in our internal notes it says get all the crap out of the way so that fundraising can thrive. Yeah.
And. Well, that's been said to be a number of times word for word for word.
So respect for respect for donors and insisting that the whole organization has respect for donors and their emotional needs. The multi year investment cycle and appreciating. The two businesses have different cultures.
So it's more common in the USA for board members and CEOs to have an active fundraising role outside of the USA. It almost never happens. But they can take the enabling role and let it happen.
The second point on that is fascinating.
I'll be honest. When some CEOs say our board members see what's involved, they quite frankly run a mile.
But others have the opposite reaction. And when we see this, it's wonderful.
So we find a CEO who's maybe got a 20 year career in child welfare or medical research and they get the CEO's job and they think they've got to the top of the tree and then they discover their enabling role in fundraising or their leadership role in fundraising, and their personal ambition comes back again. There's something new for them to learn. There's a whole new horizon of possibility for them. And they then take it upon themselves to educate themselves and to practice the leadership behaviors that enable that fundraising growth. And when that person does that, it's magnificent.
And beyond the CEO, there are board members. And what we've often found is that the board members with service user background, so with the medical qualifications or the international development qualifications, qualifications, they're there for that reason.
We've often got business people, corporate people, communications people on the board and they're not sure of their role.
And once they learn about the communications conflicts and the multi year investment cycle, we go, oh, now I know why I'm here.
Famous quote from a managing director of an investment bank who was on a charity board after he retired was that, oh, it sounds like we're not begging when we're fundraising. It sounds like we're earning our money by meeting the needs of our donors. And you go, yes. And he says, well, I know how to earn money. I can be valuable on this board. I can be valuable in this board. Now.
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[00:13:59] Speaker C: That's really interesting.
So really what this is, I think what we're saying is this process of helping organizations develop into great fundraising organizations is all about teaching people to be better leaders and teaching leaders to really live in their most effective leadership spaces. Is that right?
[00:14:24] Speaker A: Absolutely. It's all about leadership. But because the senior leadership of the organization runs two businesses, it's a unique leadership skill set. So there's a very simple way to describe it, is the service user department of any organization behaves like, you know, a public sector or academic or medical organization.
Incremental evidence driven.
The fundraising business of an organization is like a fast moving business, fast moving consumer business.
It behaves like a private sector business inside the academic medical development culture. So you have to have the skillset as senior leadership to simultaneously manage an academic or public sector culture alongside a fast moving private sector culture. And you have to be the best at both without trying to merge them. Because if you try to run your services like a private sector organization, it'll be a disaster.
And more commonly, if you try to run your fundraising like a public sector or academic sector organization, it will be a disaster. And that is that, that's where most fundraising organizations fall down, is they try to run a fast moving private sector culture, business as if it was a university or a research institute.
[00:15:50] Speaker C: Yeah, that, that resonates a lot with me. I think you and I have talked about this. I mean, when I was writing my last book, one of the aha moments I had as I talked to 70 or 80 different charities was, you know, that I would often hear the phrase we have a fundraising problem.
And on, on the surface, if you look at results, you'd say, yeah, you, you do have a fundraising problem. Right. But you get. Dig a couple layers and you, and you realize, no, you have a leadership problem and the result is just you've got decreased revenue. Right.
But if you fix the leadership issue, all of a sudden that revenue engine starts to hum again.
And then in our own research at Dickerson Baker, one of the fascinating things that we found in, I think it was 20, 23 when we were, we were asking frontline fundraisers what they needed in order to be most successful. And the number one thing, particularly as it relates to fundraisers not leaving their organization but sticking around to do the work, is that they, they said we need leadership to be fully bought into philanthropy. Right.
And so all of this makes good sense to me. And I'm the other thing that I'm kind of taking from this, so correct me if I'm misreading it, but it really is that that that C level executive really has to cultivate and develop sort of divisional leaders on both sides of the house and have the, the personal capacity to let a lot of the daily decision making go so that those people who are great at those individual capacities can actually do the work. Well, is that, is that what you found as well?
[00:17:28] Speaker A: Absolutely, absolutely, absolutely, absolutely. But also create that mutual respect between the two capacities so that they work, they're not at odds with each other.
So there's always a role for the C suite or the board because the two businesses are in conflict and tension with each other. And I don't think the conflict and tension is a bad thing as long as it's constructive. I often liken it to the conflict and Tension between a sales function and the finance function. In a private business, there should be a tension there.
Sales should always try to spend more money, and finance should always be trying to stop them.
You need that tension in there.
You need that tension in there, but it needs to be constructive. But the route into changing that leadership needs to come up from the fundraising or development function, because there is a lack of leadership training in fundraising beyond very basic.
[00:18:34] Speaker C: So.
[00:18:34] Speaker A: So it's actually, let me rephrase this.
When you look at the research, it's very easy for a fundraiser to say, oh, well, it's up to other departments to enable me to function, and therefore they will stop putting the effort in themselves to be the best and just pass the blame. So actually, what we've found, and this is the way the book is written, is you build up the capacity and the fundraising leadership first, and then the fundraising takes the lead in managing sideways and upwards to make the acceleration happen.
[00:19:09] Speaker C: Huh?
So this is just a very practical question. How does a fundraiser do that in an organization where everyone else in leadership has come up through the program ranks and maybe doesn't even respect the practice of fundraising?
[00:19:26] Speaker A: It's very simple. You've got to nag and hassle and network and have coffee and lunches until you can get some time on the agenda.
[00:19:36] Speaker C: Okay? So it all comes back to building those relationships.
[00:19:39] Speaker A: It's internal relationships, but persistence in doing so. I mean, I have a lovely little anecdote, you know, and say, how many functions are on an organization, an organizational leadership? And people can often come up with 10 or 12. And I go, no, there's only three.
An organization only exists for three reasons. One is to bring the money in.
The number two is to spend the money, and three is in the middle, which is organize the money and don't mess anything up.
That's it. Bring the money in, spend it and organize it. Or bring it in, organize it and spend it. That's why you need an organization.
Then you say to people, so look at the agenda for your board meeting. Is it balanced a third, a third, a third? And they go, no, it is balanced 45% on how we spend the money.
It's balanced 50% on how we organize ourselves. And very Rarely we get 5% on how to bring it in. And you say, why is that?
And they say, I don't know. I says, well, I know why.
It's because it's not particularly scary to plan spending the money. It's not particularly true. Is not particularly scary on organizing the money.
But going out and asking for money can be scary. So people avoid it.
Simple as that. So you need to get time on the agenda for it and people that are prepared to talk about and deal with money. It's very straightforward, simple, simple, not easy, Andrew.
[00:21:10] Speaker C: Yeah, for sure.
That three step or three function framework is really interesting to me because, and I know that we talked about this in the class that you gave, that I was in a couple years ago, but I often hear people who are kind of the brand marketers in organizations, they will say things like, our job is not about fundraising, we're about building awareness.
And I know you have a perspective on that. Talk a little bit about how that layers into this whole conversation.
[00:21:40] Speaker A: Okay, so there are two businesses.
Yeah, branding is important, but where we see problems. And this happens every time.
So you have senior leadership do not understand that they're running two businesses with one mission.
They're sitting there listening to the two businesses go at each other all their time with opinions about how each other should be doing things.
Constant conflict about investment behavior, culture and communications.
The senior leadership doesn't want to sit and be referee, so they try to think of a way out. So what they do is they appoint a brand or a communications person or team and put them in the middle and say, can you sort this out and get those two teams to agree, please?
If that is the only brief and there's no education on the two businesses one mission model, then that person cannot win.
They have been given an impossible brief.
So in order to stamp down on the continual conflict, what they do is they say, right, we're in charge, brand is boss.
Yeah. And then brand starts to dictate to the two other departments and what you then get is the death of fundraising. If I'm being quite frank.
And I can evidence that, however, if you put the brand people in with a clear brief, that their job is to bring consistency of personality, tone of voice and visual recognizability, but that the product, and therefore the direct messaging for programs and for fundraising is different and just be the best of both. Then the good brand and communications people, they light up and say, thank goodness I've got a really, really clear brief.
And things really fly at that point.
And your direct question about raising awareness, the data is emphatic. You don't get money unless you ask for it, Andrew.
Simple as that. I'm going to loop back to the previous conversation. It'd be really easy if we could just raise awareness and money poured in, because then we could, lots of money without the embarrassment of Asking for it. Boards would love it. Everybody would love it. People should just clap and send us money. Doesn't happen.
You have to ask for it. So raising awareness, fantastic. If you are campaigning or trying to get more people to ask your services department for help, raise awareness for that reason and prove your credibility, but it won't drive fundraising. Revenue growth, fundraising, you have to ask for it. It's specialist.
[00:24:30] Speaker C: Agreed. Okay, so we've set the table that all of this is driven by effective leadership.
You and I have also talked about the fact that very few organizations, very few trade associations, very few external consultants are addressing this issue. It's something that I'm passionate about. That you're passionate about. So let's talk a little bit about the mission that you and I are about to embark on together to help identify and build capacity in the sector around this. Talk a little bit about your vision for that.
[00:25:07] Speaker A: Okay, I've got it. And this is why we're speaking. Andrew marries up with the work you've done at Dickerson Backer perfectly.
It takes a special kind of leader to drive fundraising revenue growth.
So one thing that our academics did uncover was what Jim Collins called Level 5 leadership when he wrote his book From Good to Great. And that's defined by a leader having a combination of tremendous will and personal humility.
So incredibly driven and persistent, but very humble about their own place in that success.
We can build on that because of the research that we've done.
And we can say, where does the tremendous will come from?
Well, in the private sector, which Jim Collins studied, of course, it was to add shareholder value and to have a good product.
So the layering ahead goes, the layering that makes leadership in the nonprofit different for fundraising is that they have to have that same drive for financial success and personal humility that Collins identified. But on top of that, it's what's driving the tremendous will and it's the purpose of the organization.
It's the absolute drive to fulfill the purpose. So these leaders, they can make the hardest of decisions. And when we measured their resilience, they were tougher than their counterparts in the private sector.
They were absolutely iron fist and velvet gloss. They were very, very, very driven people.
So that leads us to a wonderful three word phrase that describes how you get this fast moving, driven, money making culture and the fundraising team inside the moral and ethical environment that is a nonprofit. And it's very simply, this purpose is boss.
Once all your decisions are driven by that defined, palpable purpose, then you have the hierarchy that is necessary to drive growth, but within the correct model and ethical framework.
[00:27:34] Speaker C: That's, that's, I think, a really clarifying piece. You know, I think we talk a lot about purpose and we talk a lot about mission.
But if, you know, that is such a clarifying sort of call to arms, if you will, for, for leaders to really embrace that and own it. And I love hearing that, you know, the, in your research, you found that they're actually the.
So charity leaders display even a greater level of resilience than private sector leaders. I think oftentimes there's an arrogance of people saying things like, well, you know, if you only had a private sector leader in that role, they would do so much better. So it's really interesting to see that, that comparison there, that's an interesting one.
[00:28:19] Speaker A: Because, you know, it's often thrown up in online debates here. Charities should behave more like businesses. What complete nonsense.
You know, there are charities have been around for two, 300 years and very few businesses that manage that.
No, charities should behave like excellent charities. The only bit you should behave like a business is the fundraising subculture inside charity culture.
[00:28:44] Speaker C: Yeah, I think that's a great distinction and it, it really sets the, sets the conversation well, I think to, to be able to talk to more organizations about how they bifurcate that business and run those two successfully.
One of the things that we're going to do just to have a little fun with this because we've probably all run across terrible leadership stories, is we, we want to invite listeners to this podcast, folks who follow you and buy the book, I mean, kind of anybody in the sector, to share with us some of their most difficult, most challenging, most cringe worthy leadership experiences that they've had. So for anyone who's listening to this right now, if you go to laughable leadership.com, what we want you to do is anonymously share with us those stories. We will make sure they stay anonymous. We, we will rewrite them to make sure that there's no identifying information.
But we want to share back to the entire sector some of those most challenging leadership stories so that we can shine a light on what great leadership looks like and what sort of lagging leadership looks like and be able to create a clear distinction.
And so we just invite everyone to do that. Share it with your friends. Get everybody else that you know in the sector. We know you've had those experiences because you tell us already now it's just a time for us to retell those stories across the world as we go on this search to find those great fundraising leaders.
Alan, how does somebody get a copy of your book?
[00:30:24] Speaker A: Because we're global. The best thing to do is just go to our website, www.revolutionize.com and I'm afraid that revolutionize is spelled with an S because I'm from Scotland, not the USA.
Revolutionise.com and if someone wants to connect.
[00:30:45] Speaker C: With you directly, is the easiest way to do that also on your website? Or is there another way?
[00:30:48] Speaker A: Just, just come, come to me through the website is the easiest way to do it. I never know where.
[00:30:53] Speaker C: All right, my friend, thank you for being with us today. I appreciate it.
[00:30:56] Speaker A: Thanks very much Andrew. A pleasure as always.
[00:31:00] Speaker B: Have you read My Amazon Number One Best Selling Book, 101 Biggest Mistakes Nonprofits make and how you can avoid them yet?
It's the book that I wrote with expertise from over 20 nonprofit leaders and their 300 years of combined experience.
You can download it for free today. Just visit andrew olson.net and go to the free Resources tab on my site.
Thank you so much for joining us for this episode of the Rainmaker fundraising podcast. I have two favors to ask before I let you go. First, if you enjoyed this episode, please rate us and review us on whatever podcast platform you use to listen to this show. It'll help us reach more people with the tips and insights that you find most valuable. My second favor is a little bit.
[00:31:43] Speaker C: Of a favor to ask, but also.
[00:31:45] Speaker B: A little bit of a gift to you. I write a daily substack newsletter called the Leadership Growth Newsletter. It's free to you and I write it to help people leave more effectively. And if in both life and at work, I'd love for you to click the link in the show notes and subscribe to that newsletter as well. Until next time, friends. I hope you make it a great day.
