GuideStar Webinar (01/25/12) - Strategic Philanthropy in the "New Normal"
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GuideStar Webinar (01/25/12) - Strategic Philanthropy in the "New Normal"

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GuideStar webinar on 01/25/12. ...

GuideStar webinar on 01/25/12.

Presenters: Ned Zechman, Senior Consultant, Orr Associates, Inc. (OAI); John Wm. Thomas, Managing Director, OAI; Dick Walker, Managing Director, OAI (moderator)

http://www2.guidestar.org/rxg/news/webinars/webinar-archive.aspx

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    GuideStar Webinar (01/25/12) - Strategic Philanthropy in the "New Normal" GuideStar Webinar (01/25/12) - Strategic Philanthropy in the "New Normal" Presentation Transcript

    • Strategic Philanthropy in the “New Normal” January 25, 2012 John Wm. Thomas, Managing Director, OAI Edwin (Ned) K. Zechman Jr., Senior Consultant, OAICopyright © 2012 Orr Associates, Inc. All Rights Reserved.
    • Introductions John Wm. Thomas, Managing Director •33 year career in development •COO of CHF 1994 – 2008 •Completed campaigns for $40 million, $301.5 million and began $500 million “Transforming Children’s Health” Campaign •OAI Consultant since 2009, Managing Director since 2011 Edwin K. (Ned) Zechman, Senior Consultant •30 years as CEO of pediatric medical centers •CEO of Children’s National since 1994 •Tripled budget and plant; international reputation secured •CEO during 3 comprehensive campaigns. Total Value: $1 billion over 17 years at CNMCCopyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 2
    • Agenda The “New Normal”: • What is different and why • What it means for fundraising • Overview of the new “strategic philanthropy” New Era Strategic Philanthropy: • How it works and why • Fundraising impact • What’s a leader to do? • Wrap up/questionsCopyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 3
    • About You Size of Organization 6% 3% 12% Organizations under $1 million Organizations between $1-10 million 45% Organizations between $11-50 million Organizations between $51-100 million Organizations over $100 million 34%Copyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 4
    • About You (cont’d) In general, revenue from philanthropy since 2008 is: 30% 30% Trending Down Trending Up Unchanged 40%Copyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 5
    • About You (cont’d) Methods (corporation foundations, government and Trending Down Trending Up Unchanged grantwriting organizations) Recipients (academic, community foundations, education, faith Trending Down Trending Up Unchanged based, healthcare, membership and public chairity organizations) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Copyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 6
    • It’s Time for an Alternative Model for Strategic Philanthropy: Why? Our proposal: 1. The recession’s impact is far reaching 2. National and global economies have been changed permanently 3. Institutions will be more dependent than ever on philanthropy 4. The pressure on philanthropy will increase 5. Strategic philanthropy is reinventing itself • “Necessity is the mother…” • Campaigns will continue to be relevant • Campaigns will be different 6. Imaginative, bold leaders will grasp the new realities and forge aheadCopyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 7
    • Our Thinking Based on Experience (1994-2012) • First Campaign: 1990-1995 – Traditional – Cookie cutter – Fatiguing • Next Two campaigns: 1996- 2012 – Massive – Untraditional – Successful – over goal • Maybe this is telling us something!Copyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 8
    • Global Recession History During our Children’s National Years 1990 – 1992 “V” shaped Bush I administration Clinton years begin 2001 – 2002 “U” shaped Response to 9/11 Stock markets drop Tech bubble pops 2007 – 2012 “W” shaped Housing, mortgage debacle and high unemployment 5-7 year recoveryCopyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 9
    • The “Traditional Campaign” Model Key Elements: • Driven by organization’s strategic plan • “Feasibility” Study • High-level Campaign Committee – Serves for life of campaign • Sequential giving/top-down asks • Gift table and donor pyramid • Limited gift acceptance policy • Volunteer driven, staff supported • 5-year horizonCopyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 10
    • This Model Worked Until 2008… What Happened Next? Actions that rocked philanthropy: 1. The global economy goes south 2. Traditional funding sources shrink 3. Regional economies are volatile 4. Government support is retracting 5. Reliance on philanthropy increases 6. Business methods applied to giving 7. Social media fundraising growsCopyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 11
    • The New Era for Philanthropy A “new normal” economy: • Countries in default • Biggest states in the U.S. nearing or in bankruptcy • Long term debt soaring. Unemployment at 9% • War as a certain uncertainty • Fears keep gold high BUT stock markets surging • Governments trimming social programs • Governments dependent on NPO sector • Health reform as an uncertain certaintyCopyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 12
    • What This Means for Campaigns 1. Recession recovery endures 3-5 more years 2. Campaigns will end, begin and continue during that period 3. Strategic planning horizons shorten 4. Private funds needed more than ever 5. Pressure on philanthropy is acute But will our willingness to give keep pace with need?Copyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 13
    • New Era: New Model Characteristics: • Strategic: mindful of the new world • Strategic and philanthropic plans intertwine • Aimed at a new type of donor • Unannounced • No campaign chair(s) • No steering committee • Donors become leaders. Leaders become ambassadors • Staff driven cultivation and asks • Decentralized volunteer structure • ContinualCopyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 14
    • New Era Strategic Philanthropy 1. NPO leaders integrate plans: – NPO leaders “get” the interactivity of strategic and philanthropic plans – Strategic and philanthropic plans develop in parallel – The two plans are in constant dialogue -- this begins at the top – Strategic and philanthropic planning and evaluating never stopsCopyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 15
    • New Era Strategic Philanthropy (cont’d) 2. Cases and case statements respond to the times – It’s about the parts, not the whole – Business plans supersede large case statements – People/corporations connect to the program NOT the institution – It is less about “bold” and more about “achievable” – “Sustainability” a constant issueCopyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 16
    • New Era Strategic Philanthropy (cont’d) 3. Campaigning never ends – Margins for philanthropy are better than any other revenue source – NPO’s weave together strategic and operational funding into “comprehensive” campaigns – Strategic plans require strategic philanthropy – “Gift structuring” changes donor relationships and stewardship – Consequence: As one campaign ends another beginsCopyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 17
    • New Era Strategic Philanthropy (cont’d) 4. Cultivation strategies take new era into account – Fear and uncertainty drive donor caution – Donors less willing to part with their capital – Large gifts take longer to consummate – Gift structuring reduces near term cash outlays – Gift tables bulge at the lower middle – Largest gifts come from unusual sourcesCopyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 18
    • New Era Strategic Philanthropy (cont’d) 5. Givers become Leaders – Old fashioned campaign committees out – Campaign connects donors to parts about which they care most – Givers become philanthropic leaders for critical organizational subsets – Organizational subsets have mini-boards or councils to capture and motivate donor enthusiasm – But boards don’t always turn to philanthropic leaders for membership!Copyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 19
    • CEO/CDO Alignment • Will CEO’s agree? Support this approach? • If not, how does the CDO persuade? • Others ways for black and white CEO’s to embrace gray?Copyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 20
    • Three Elements of Leadership Strategic Leadership Vision Purpose Communication Values Operational Team Leadership Leadership Energy Task Behavior Manager as Coach Creating the Work Individuals Team ClimateCopyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 21
    • What is a Leader to Do? Strategically: • Look two hills ahead • Have clear hypotheses about the future • Communicate them clearly Operationally: • Translate hypotheses into plans • Translate plans into actions • Communicate these at every opportunity Team work: • Get widespread ownership of strategies and tactics • Assemble teams to execute tactics • Expect that all will go forward togetherCopyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 22
    • “Managers solve problems… Leaders anticipate them.”Copyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 23
    • “Operating with the mindset of an entrepreneur is the only fruitful way to proceed. Successful entrepreneurs take calculated risks, quickly.” -- Rebecca Sive (on surviving the ‘new normal’), The Chronicle of Philanthropy, February 10, 2011Copyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 24
    • The New Era Requires Strategic Philanthropy, New Thinking and Risk Aware Execution This… …becomes this Sequenced plans Co-dependent Plans Case dependent Business Plan Dependent One case Many Cases One Cabinet Many Councils Hour glass GT Coke Bottle GT Long term volunteers Ad Hoc Volunteers Five-year horizon Longer HorizonCopyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 25
    • Questions? Feedback? John Wm. Thomas Edwin K. (Ned) Zechman 202-338-6100 ext. 112 202- 338-6100 jwmthomas@oai-usa.com nzechman@oai-usa.comCopyright © 2012 Orr Associates, Inc. All Rights Reserved. www.oai-usa.comFollow the Event on Twitter: #newnormal 26