Toe to toe with Dan Pallotta

If you enjoyed my post Should NonProfit Leaders be Like Boiled Broccoli, you might be interested in the discussion on Sean Stannard-Stockton’s Tactical Philanthropy blog between Dan Pallotta (author of Uncharitable), Robert Egger (founder of DC Central Kitchen), with me chiming in from time to time.  (It’s also worth checking out Sean’s FT article, “Sacrifice Notion Sabotages Nonprofits” that appeared today.)

Lots of food for thought here, including how much is the “right” amount an organization should spend to raise money, whether raising more money quickly is always better, appropriate compensation in the nonprofit sector, and how to think about efficiency and effectiveness for nonprofits.

Congrats to Sean for writing a post that inspired this conversation.

Becoming a must-read blog (or, tackling my RSS feeds)

As part of my year-end housecleaning, I’ve been trying to catch up on the 30 or so blogs that are in my RSS feed.  It’s been time-consuming and stressful.

(for those of you not using an RSS reader, I encourage you to start.  It makes blog-reading incredibly easy and frees up your Inbox too.  I use Bloglines but Google Reader or any reader out there will do).

I discovered that the blogs I subscribe to fall into four categories:

  1. Must-read blogs: absolutely read every day
  2. The contenders: potential to move to must-read status
  3. Shoulda/Coulda/Woulda: read only in catch-up mode/am planning to delete
  4. Wildcards: New, recently added, haven’t figured out what to do with them

“Must-read blogs” are the blogs I’m passionate about.  If someone asked me, “what blogs should I absolutely read?” these are the ones I’d name.  The rest are just the rest.

If you’re a blogger, think about what it takes to make it to someone’s must-read list: they have to hear about you, read a post, be excited by that post, read some more, add you to their reader or an email feed, and keep on reading daily…. until you’ve worked your way into the fabric of their day.  Phew!  That’s a lot of work.

So I’m flattered and thankful that I’ve made it onto some of your must-read lists.  I know how valuable your attention is and how short everyone is on time, and I know that every day you make a small decision to keep me on that list.  So thank you.

I do hope that you keep on reading, and that, when the mood strikes you (and I write a post that’s compelling enough) that you keep on spreading the word about this blog.  (Commenting and pingbacks and forwards all count).

Also, I’d like to ask you dedicated readers tell me more of what you’d like to hear about in 2009.  Write a comment on this post or just email me directly via the Contact form.

The corollary here is if you’re in a nonprofit, your constituents (Board members, advisors, donors) have their own implicit list of where you fit in with their priorities.  And it’s easy to confuse the people who have the biggest names or write the biggest checks with the people who are most important to you.

Hint: these people ARE important, but they’re often not as important as those people who put you on their “must-read list.”

For example, if a major donor just told you that they were planning on giving to you this year, but other organizations they support are more in need, you’ve just learned that you’re important to them but not at the top of their list.  Listen to that feedback and act on it in 2009.  You want to build an organization that’s at the top of lots of (powerful, smart, influential, visionary) people’s list, and you want to figure out how to engage and motivate those folks who love you best – to journey together with you in the coming year and to co-create the change you’re trying to make in the world.

Lots of work to do, but it’s exciting.

Here’s wishing all of you a Happy New Year.  You have my thanks and gratitude for tuning in.

Be well.

Should nonprofit leaders be like boiled broccoli?

Nicholas Kristof had a very interesting column in Tuesday’s NY Times called “The Sin of Doing Good,” focusing on Dan Pallotta and his new book, “Uncharitable.”  Kristoff leads off the column with this question: “If a businessman rakes in a hefty profit while doing good works, is that charity or greed?”

Pallotta ran a for-profit company that invented fundraisers like AIDSRides, events which “netted over $305 million over nine years for unrestricted use by charities” ($35 million / year, for those keeping score) while Pallotta pulled in a $394,000 salary, which is, in Kristoff’s words, “low for a corporate chief executive, but stratospheric in the aid world.”  And if you want to get a whiff of the ire Pallotta inspires, check out this discussion on Philanthropy.com.

Let me start by saying that I know nothing about Pallotta outside of what I’ve read in this article and poking around some on the Internet, so I cannot vouch either way for his person, his values, etc.  However, a bigger-than-life personality who is finding new and exciting ways to raise visibility and funding for important causes certainly catches my attention (hence the manifesto I wrote a few months back).

Here’s Kristof’s money quote from Pallotta, which really makes you think a little harder about this question:

We allow people to make huge profits doing any number of things that will hurt the poor, but we want to crucify anyone who wants to make money helping them.  Want to make a million selling violent video games to kids? Go for it. Want to make a million helping cure kids of cancer? You’re labeled a parasite.

Interesting, huh?

So, for example, we’re OK with Jay Shipowitz, the current CEO of Ace Cash Express (one of the largest payday / predatory lenders in the United States, which makes high-interest loans primarily to poor people) earning more than $750,000 as COO back in 2003 (the last public data I could find; they went private in 2006).  Never mind that that’s triple the average 2008 CEO salary for the largest nonprofits.  (And I don’t even have time here to get into the complexities of Ace Cash Express making headlines by giving nearly $1 million to the United Way.)

The (provocative) question I’d like to ask is is: is making sure nonprofit leaders (and their staff) have pure motives and low salaries more important than getting the results we so desperately need? How do we, as a society, want to reward people for the paths they take in life?

And here’s the broccoli analogy: for years, whenever I made vegetables with meals, I thought, “these are going to be healthy.”  Hence the boiled, flavorless broccoli.  Guess how often I prepared (let alone ate) the broccoli.  Pretty infrequently.

More recently, I’ve discovered if I make my veggies taste good, they become part of almost every meal.  So now they often have olive oil, salt and pepper, and sometimes even bits of bacon or pancetta, but they taste delicious and they’re part of my daily diet, not the exception I dabble in when I’m feeling virtuous.

(And for the ultimate blogging aside: if you want to change your mind about Brussel sprouts forever, prepare them  following Ina Garten’s recipe in her Barefoot Contessa Cookbook.)

So while there’s a woman who I met once – who I’m sure will live forever – whose diet consisted mainly of humongous bowls of salad (no dressing), I don’t think that’s going to work for most people.  Large numbers of people are healthier when whole societies have cuisines that centers on fish and olive oil and red wine (go figure!).

So while I don’t know much about Dan Pallotta, I’m sure we need more openness to new ways of doing things in the nonprofit sector, and new ways to attract, motivate and keep the best and brightest.  Maybe this is through contests or pay raises or incentive pay – for now I’ll defer to others to fill in the details.  But I would love to live in a world where society stands up and says, “These problems are so big and important that we will align resources against them to get them solved.”

Better yet, if someone really were to make a great living solving one of the world’s big problems, don’t you think that person would be just as likely to plow the money they made back in as charitable donations?

Food for thought, anyhow.

How to Listen to your Critics

Recently I took a short vacation at a well-known family resort. Before going, I had searched the Web looking for feedback about the hotel from other travelers who had been there.  Mostly I found a lot of complaints about ‘terrible service.’

To my surprise, virtually every person working at the resort was incredibly polite and professional – the check-in woman who got us a room right when we arrived, 4 hours before check-in (after a 4:30am wakeup that morning); the woman who mercifully got a load of laundry done on a Sunday; the guys renting the giant water tricycles…you get the idea.

More surprising still, the day I was leaving I rode up the elevator with two women, one of whom was in the middle of a rant to her friend.  “I’ve never, ever, been to a hotel with such unbelievably poor service!  Never, in all my years!!!”

Who do you think is more likely to run home and share their opinions on a travel discussion board?

The point is, we all know intellectually that the people who stand up and give feedback are, in general, those who represent the most extreme views.  They might be the angriest or the happiest, but they’re not average (and I do think people tend to speak up more when they’re unhappy).  Even knowing this, it’s very easy to feel like the best way to listen is to respond to the people who talk the loudest.

Another example: I recently held a meeting for a group of 10 people to ask for their feedback on a new program.  Over the course of the one-hour meeting, six people spoke freely, three made a few comments, and one person said nothing.  After the meeting, we sent a note to the participants and were very specific and very direct that we really wanted feedback and further thoughts.  Only then did the person who had been silent in the meeting write an incredibly thoughtful, two-page email in response.

There are two points here:

1. Listen to those who talk the loudest, and be honest with yourself in reflecting on the feedback you’re hearing.  If there’s a kernel of truth, that person is a “canary in a coal mine” – someone who is speaking up early and probably represents a silent majority.  But also be ready to hear the feedback, consider it, and discard it.  This too is a form of leadership.

2. Make sure you ask for feedback lots of times in lots of ways.  This is as much about creating a culture of feedback (within your organization and with your stakeholders) as it is about how you ask, being genuine when you ask, and asking a lot of times in lots of different ways.

To end, a quotation from the Buddha:

Believe nothing, no matter where you read it
or who has said it,
not even if I have said it,
unless it agrees with your own reason
and your own common sense.

Boston Globe’s Big Picture

You have to check out The Big Picture, The Boston Globe’s amazing photo blog.

As we approach the end of the year, and reflect on all the year has brought, it is natural to focus on our own struggles and triumphs.   So I appreciated this reminder of the big, beautiful, complex world we live in.

Images help us remember that everywhere, people are working to build lives of dignity and purpose, no matter what their circumstance.

Take a minute out of your day and look at these.  They are just incredible.

(You can subscribe to The Big Picture in an RSS Reader).

Here’s just one of the photos.  Really, check it out.  This is absolutely worth it.

Kenyan athletes train at Eldoret's Chepkoilel stadium

Kenyan athletes train at Eldoret's Chepkoilel stadium

(hat tip to my friend James on this one).

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And, speaking of photography, if you are in New York and haven’t had the chance to see Susan Meiselas’ photos at the International Center of Photography, it’s well worth a visit.  Here is one of her more well-known photographs, of a Sandanista, taken in Nicaragua in 1979.

Sandanista at the walls of the Esteli National Guard headquarters

Sandanista at the walls of the Esteli National Guard headquarters

Start with the punchline, please

I had two half hour conversations today that were completely upside-down.

In both cases I was talking to people I didn’t know very well, and I had agreed to (not set up) the calls.  Both people were smart, capable, and successful, which is what made the conversations that much more perplexing.

In retrospect, if I were to draw up an agenda for the call it would look something like this:

Minutes 1-2        Introductions and pleasantries

Minutes 3-15     Background information by the caller

Minutes 15-20  Discussion of potential synergies / overlap

Minute 21           By the way, I also called to tell you….. (the punchline)

Please, please, please, reorder this agenda and put the punchline upfront (in minute 3)!  Tell me why we’re talking at the start of the conversation.

For example, let’s say you’re having an informational interview.  Respect the time and intelligence of the person you’re calling and start out by saying, “I’m really interested in the sector you work in, and I’m trying to learn more about how I might transition from my current role.”  That’s so much more helpful than pretending you’re not looking for a job.

Similarly, if you’re trying to create a business partnership, why not lead off with, “So-and-so suggested we talk because, even though we’re in different lines of business, there’s a real overlap between the types of people who are interested in what we both do.  I’d like to explore that overlap, but first why don’t I tell you more about our organization so you have a little background?”

This sounds obvious, but so often people “bury the lead” of their story and lose their audience in the process.  This happens in presentations, emails, conversations, you name it.

No one wins if you drone on about all your thinking, your deductive process, your analysis, and then say, “So what this all means is…”  You’ve lost me by then.

Here’s why I think this is harder to do than it looks:

  1. People are sometimes nervous to ask for things. The padding up front is a great way to stall.
  2. Being direct, but doing it with grace, is tricky. If you want to ask for something, be direct, but don’t be so direct/blunt that you put someone off.  (and if your ultimate ask is for someone’s investment or their business, you don’t necessarily lead with that ask.  You start with asking for their time, attention and consideration).
  3. It ain’t the same every time. Doing this in the right way also depends on who you’re talking to, your relationship with them, their personality type, culture, etc.
  4. People confuse building rapport with sharing information. Building a rapport is very important;  but this is not the same thing as sharing a bunch of random information, which is potentially distracting without the right context.

When someone puts the punchline at the end, you find yourself having a whole conversation that communicates something like: “Ignore the man behind the curtain and pay attention to this semi-interesting, semi-distracting stuff I have to say first.  This will show that I’m smart and credentialed and doing important stuff, and it will make you more likely to accept what I’m asking of you once I get around to it.”

Sure, I’m interested in what you have to say and all the great work you do.  But the man behind the curtain is often the whole point, so let’s both acknowledge he’s there and get on with it.

If I know nothing about why we’re talking, think about how hard I have to work to make sense of what you’re saying.  While you’re going on about who you are, what your organization does, what’s been going on in the last three months, I’m sitting there trying to figure out “What part of this story matters?”

Pretty soon, you’ll lose me.

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On the flip side, if you find yourself the victim of a buried punchline conversation, the time to perk up is when you hear ANY sentence that starts with:

“By the way…”

“Oh, and one other thing…”

“I’m not saying that…”

…or any other big disclaimer.

That’s the verbal billboard that screams: WHAT I’M ABOUT TO SAY IS THE WHOLE POINT OF OUR CONVERSATION!!

Another data point: Merrill Lynch

If you’re curious about exactly how out-of-whack incentive pay (bonuses) got in recent years on Wall Street, check out this recent NYTimes article called, “The Reckoning: On Wall Street, Bonuses, Not Profits, Were Real”, especially this tidbit that gives an order of magnitude on bonuses:

Clawing back the 2006 bonuses at Merrill would not come close to making up for the company’s losses, which exceed all the profits that the firm earned over the previous 20 years.

The article is really worth a read because it gives some more detail on how far things have gone in recent years on Wall Street (in terms of the number of people raking in millions), and also points to the core of what got us into this mess: people responding as one would expect them to to incentives that offer the potential for unprecedented personal financial gains in the short-term.

When pay systems are set up such that some of the smartest, most ambitious people stand to make enormous amounts of money if they ratchet up risk, what do you expect will be the outcome?

There’s this misplaced sense that some magical self-correcting mechanism would keep things from getting out of hand, but in retrospect it’s hard to understand why we thought the music wouldn’t stop at some point.

What strikes me is that all the watchdogs (the risk people in firms, Board compensation committees, the rating agencies, the SEC) have collectively failed in their oversight roles, and without significant change we won’t address the root of the problem.

(And while I’m no expert in executive pay, doesn’t it seem obvious that (much) less cash and (much) more restricted stock is the only way to go?  Why is this so hard to get right?)