The Intelligent Edge - Helen Brown Group

September 21, 2023 By Helen Brown

How Are You Managing?

Each month we invite members of the team to write an article of their choosing for The Intelligent Edge, and I’m always surprised and delighted by the variety of topics that inspire my colleagues. Today is no different, as HBG Consultant Debbi Olley explores the important subject of what makes a good manager. ~Helen

Debbi Olley

When I started writing a blog post about management, I was daunted by the prospect of sifting through source after source, trying to drill down to essentials.

There are thousands of articles and books about management, written both from the perspective of being a better manager and also from the viewpoint of being a better employee. Though it’s tempting to try to cover both topics, particularly for those of us who have been both, I’m going to focus on how to be the best manager one can be.

“Would I rather be feared or loved? Easy. Both. I want people to be afraid of how much they love me.”— Michael Scott

Who doesn’t love a great quote from that Dunder Mifflin manager extraordinaire, Mr. Scott? And this one contains much to contemplate. As a manager, how do you motivate your staff?

We likely can all agree that using fear, including fear of public humiliation, is not the best way to proceed. LinkedIn is crammed with horror stories of people’s work being torn up in front of coworkers, employees being screamed at, and worse. It’s just plain hurtful and of course never truly motivates anyone.

But it’s also interesting to think about the other part of Michael Scott’s quote. As a manager, do you secretly want to be loved by your team? Or, if not loved, at least admired? If so, that’s a very human response. But in its own way, it might be as ineffective as trying to motivate using fear.

Personally, I have found that one of the toughest things about being a better manager is trying to remove your own needs and fears from the equation. This article from Harvard Business Review includes some great suggestions for ensuring that managers are focusing on the needs of their team, and ultimately encourages managers to communicate well:

As their manager, the responsibility falls on your shoulders to initiate the tough conversations and get people talking about their situation. It’s best to set the example and approach these discussions with vulnerability.”

This is not an easy thing to do, but it does get to the crux of it, which is to try to leave your own needs out of the equation. In fact, when the authors use the word “vulnerability,” they could just as easily replace it with “humility.” This article, also from Harvard Business Review, advocates not only the avoidance of trying to motivate by using fear or motivation but also puts the focus on humility:

It’s more effective to show them what’s expected and how they can accomplish their task. This may take rolling up your sleeves, getting out from behind your desk and doing some of the less glamorous work.”

As employees, seeing this type of behavior from our managers creates a lasting impression. A friend who is now a manager himself never forgot the manager who swept the floor if the custodian was unavailable. “She would never ask us to do something she wouldn’t do herself,” he told me. It’s hard to forget that management style.

As managers who likely are also managed by someone else, we can hope that our managers will try to put us first. But when it comes to our own teams, we have to think less about ourselves and more about the person we’re managing. And in many ways, that leads to another helpful quote—one that distills good management well:

“My religion is kindness.” — Dalai Lama

While article after article, such as this one, lists bullet points and tips on how to be a better manager, it’s hard to miss a common theme, and that is simply following the Golden Rule: treat people as you would like to be treated yourself.

This article, courtesy of Forbes, focuses on the positive effects of kindness in the workplace, emphasizing that “when we work with people who share our core values—including kindness—we produce the best results.”

There is also the reality that, in an environment where there is at least one toxic employee, managers do need to address this problem quickly. This article from media company Business Leadership Today acknowledges that a culture of kindness in the workplace is impossible if this issue is not handled.

As someone who has been a manager and has had numerous managers over a 25+ year career, I will never use personal examples in a public source, nor will I deny there are times you can try to be the best manager possible, and bad situations still arise.

But I will close with this—after a long, hard road through COVID-19 and a renewed awareness of just how brief and fleeting life can be, I will emphasize that the best managers I remember the most vividly are not those who were strong leaders, or led by example, or made sure promotions and development opportunities were available, though of course I appreciated all of that. No, the people I remember as terrific examples of managers are those who sympathized with personal grief and were supportive and kind through hard periods.

Sadly, and conversely, it was those managers who downplayed both personal and collective grief that I will always remember for the opposite reason.

My personal belief? Management 101 can start and possibly even end with one bullet point: Be kind.

September 14, 2023 By Melissa Bank Stepno

It’s Time: Highlighting Six Changes

Two weeks ago, I attended my last Apra Board Meeting, immediately followed by the 2023 Apra Prospect Development Conference. As a team building exercise, we kicked off our board meeting with “6 Word Memoirs.” As one might expect in a group of about a dozen people, the tone and tenor of our memoirs varied – some professional, some personal, some serious, some funny, some focused on being “in the moment”, others focused on lifelong characteristics. Mine was as follows:

This Year. Many Changes. Reflective. Bittersweet.

For those who do not know me, 2023 has been a year of change. About 6 weeks prior to the conference, I started in my current position at The Helen Brown Group. And, after 6 years of being on the Apra Board, my term was coming to an end.

As such, my mood was very, well, reflective. As you might imagine, a 6-year board tenure could feel like both a short and long amount of time.

On the one hand, some things within Apra and within our profession have not changed over the past 6 years – and maybe they never will. We are still debating whether the full prospect profile is “alive” or “dead.” We are still complaining about database conversion projects. Most of us are planning, in, or about to finish some type of large capital campaign. You get the idea.

On the other hand, over the past 6 years our industry has changed, evolved and grown substantially! Like many of us, I don’t always like change. But, change is not only a constant, it is also necessary. I have learned to embrace the later.

Also like many of us, I often have trouble seeing the forest through the trees. So, since the themes of change and sixes have both been on my mind, I thought: it’s time to highlight 6 “trees” that have sprouted in our industry’s “forest” over my 6 years on the Apra Board.

1. COVID – COVID had a transformative impact on almost every aspect of our lives – professional and personal. Did I really need to mention this? Probably not. However, it was so impactful that how could I not mention it? Enough Said.

2. ChatGPT, AI and similar – do I think ChatGPT or AI is going to replace our profession? No. Do I think they are going to change the way we do our work. Absolutely.

Some of us are old enough to remember when the Internet was rumored to replace our profession and it obviously didn’t. We are still here!

However, I think we’d all agree that the way we work is significantly different – more efficient and faster – than the days of library visits, stacks of books and lots of phone calls to request information. My suspicion is that this era of technology innovation will have the same type of impact, forcing (in a good way!) us to evolve.

3. DAFs – Did Donor Advised Funds exist 6 years ago? Yes. In fact, there’s a great blog post by my colleague Jayme Klein here that reviews the history of DAFs.

However, in the past few years the importance of DAFs and their impact on our industry really started to explode. In fact, according to the National Philanthropic Trust, DAFs grew 28% in 2021 alone.

Those who follow GivingUSA have also noticed that over the past couple of years there has been a decline in individual giving alongside an associated increase in foundation giving. Most experts attribute a portion of this shift directly to the impact of DAFs.

If donor giving patterns are changing, our industry must learn to adapt and keep up with those changes.

4. Data Governance and Privacy Landscape – while FERPA and HIPAA certainly existed for way longer than my six-year looking-glass, we now have an alphabet soup with GDPR, CCPA, PIPEDA and VCDPA added to the mix. This, of course, is an evolving landscape with legislation pending (or already in effect) in other states and countries.

Sites like The Nonprofit Alliance can help us track legislation. However, knowing about the law is only ½ the battle. Perhaps the bigger challenge will be in the nimbleness and complexity needed to adhere to all of variations across so many laws.

While my first 4 are broad and impact the entire philanthropic landscape, I wanted to reserve my last 2 specifically for Apra, since my tenure on the Apra board was the inspiration for this post. Of course, many trees have sprouted within Apra over the past 6 years. I’ll highlight two:

5. Apra’s DEI Data Guide – In 2021, Apra published its first version of a new DEI Data Guide (spoiler alert: an updated version is due to be published later this year, along with a brand new asset on data minimization!). The Guide’s purpose is to serve as a resource for best practices in the ethical collection, storage, and usage of DEI data.

Sure, Apra was talking about DEI 6 years ago. And, Apra has always prided itself on providing an ethical guidepost for the philanthropy profession. It even has an entire section of its website focused on Ethics and Compliance.

But talking about something and having text on a website does not make it a seminal cornerstone of a professional association.

It is to this end that the importance of the DEI Data Guide cannot be understated, especially as Apra is a community that lives, breathes and thrives on using data to advance philanthropy.

In quick stead, the Guide has also served as a launch pad that helped elevate Apra as “The Leader” in assuring the proper collection, use and protection of donor data across the entire philanthropic sector. In fact, the Guide has been promoted in efforts by AFP, CASE, aasp, and the Chronicle of Philanthropy, just to name a few.

6. Due Diligence – Okay, full disclosure: I was having a bit of trouble picking this last one. There was so much to choose from that I really couldn’t decide!

My mind was quickly made up when I read Heather Willis’s Intelligent Edge post last week on Comprehensive Due Diligence Research. Of course!

Due diligence has always been in the back of a researcher’s mind. I distinctly remember an example from my time as a Prospect Researcher at Boston University when a colleague realized that a prospective donor was possibly connected to a terrorist organization. Yikes! What to do? We talked about it and made some ad hoc decisions on how to handle next steps. We had no formal policy or procedure in place. This was twenty years ago.

Now, Due Diligence is a practice of its own with guideposts and guardrails to follow. We’ve come a long way, baby!

In addition to Heather’s great insight, also check out Apra’s Due Diligence Toolkit, published in 2020, along with about a dozen other resources in Apra University, all published in the last few years and including a 2021 webinar featuring HBG’s very own Michele Borucki and Jayme Klein! (note: some links require an Apra membership).

Each one of my “sixes” is worth a full blog post on its own! But for now, I’ll leave you with these brief thoughts on each as I set my sights on building my next 6 Word Memoir…

September 7, 2023 By Helen Brown

The Good, the Bad, and the Ugly: Comprehensive Due Diligence Research

This week we welcome HBG Senior Consultant Heather Willis to The Intelligent Edge. Heather has been with HBG for over 11 years, and her breadth of knowledge on many topics – wealth held in ranching and farming and today’s topic, due diligence, are just two examples of why she’s frequently a go-to expert for all of us on the team. Today, Heather shares important issues to be aware of as you consider due diligence research for your nonprofit. ~Helen

Heather Willis

The Good, the Bad, and the Ugly: Conducting Comprehensive Due Diligence

In the world of nonprofits, donors play a crucial role in funding and supporting various initiatives. Prospect research serves as the foundational step in any decision-making process with a potential donor, however, it’s equally important for nonprofit organizations to ensure that potential donors align with their values, ethics, and mission.

This is where due diligence comes into play. When a person closely associated with a charitable organization becomes the subject of a scandal, the organization’s reputation can be tarnished too. The stringent due diligence practices seen across the financial services industry to comply with regulatory standards are increasingly being adopted by nonprofit fundraising teams to protect their organization from financial and reputational threats.

By conducting thorough due diligence, nonprofits can establish productive and lasting relationships with donors while safeguarding their reputation and integrity.

Understanding Due Diligence on Donors

Due diligence involves the process of investigating and evaluating potential donors before establishing a partnership or accepting their contributions. This process goes beyond simply checking financial backgrounds; it delves into the donor’s history, motivations, and potential impact on the organization. Comprehensive due diligence helps nonprofits identify potential risks and ensure alignment with their goals.

Steps to Conduct Due Diligence on Donors

Define Your Criteria: Clearly define the criteria that matter most to your organization. Consider aspects such as ethical values, mission alignment, financial stability, and the potential for a mutually beneficial partnership.

Gather Information: Collect information about the donor from public sources, such as their website, social media profiles, news articles, and press releases. This information can provide insights into their philanthropic history, affiliations, and interests.

Verify the donor’s identity, criminal history, and any potential legal issues. Various online platforms offer tools to perform such checks.

Financial Analysis: Evaluate the donor’s financial stability and the source of their wealth. This step helps ensure that the donations are legitimate and that the donor’s financial situation aligns with the intended level of contribution. Some sources of wealth may be considered sensitive to your organization.

Previous Philanthropic Activities: Research the donor’s history of philanthropic activities. Understanding their past contributions and partnerships can shed light on their values and interests.

Stakeholder Interviews: If feasible, consider interviewing individuals who have interacted with the donor, either in the philanthropic sector or otherwise. Their insights can provide valuable perspectives on the donor’s character and reputation.

Mission Alignment: Examine how closely the donor’s priorities align with your nonprofit’s mission and goals. A partnership is most effective when both parties share common values and visions.

Legal and Regulatory Compliance: Ensure that the donor complies with all relevant legal and regulatory requirements. This includes assessing their potential involvement in any controversies or legal disputes.

Conflict of Interest: Evaluate whether accepting a donation from the donor could create conflicts of interest for your organization. This is particularly important if the donor has ties to industries or causes that could compromise your nonprofit’s integrity.

Consult Experts: For more complex cases, consider seeking professional advice. Legal experts, financial analysts, and ethical consultants can provide valuable insights to aid your decision-making process.

News: General news helps you stay alert to trends, but for mitigating reputational risk, you’ll want the ability to narrow in on negative news. Given the increased focus on environmental, social and governance (ESG) commitments, it’s also useful to have the option to narrow to ESG news. Not only can this help you identify donors who might NOT be a good fit, but it can also help you identify prospects who align with your own mission.

Sanctions, watchlists and PEPs lists: Geo-political volatility like we’re currently experiencing means that sanctions and PEPs (politically exposed persons) are changing rapidly. Doing business with a sanctioned individual or entity could do more than put your reputation at risk; it can lead to regulatory risk and fines.

Legal news: This type of news can help you see if an individual or entity has a litigious past that could put your organization in jeopardy.

Company and executive information, including beneficial ownership: When it comes to corporate sponsors, you need to look beyond the entity itself. For example, a company may have hidden beneficial owners who might not be a good association for your nonprofit. Likewise, corporate hierarchies can show tangential relationships that could prove problematic or another likely corporate sponsor, but the only way you’ll know is to do your due diligence.

Balancing Ethics and Accountability

While the intention behind donor due diligence is to maintain transparency, accountability, and ethical standards, it is not without its controversies.

Preserving Donor Privacy vs. Ensuring Transparency: Controversy often arises from the tension between preserving the privacy of donors and ensuring transparency within nonprofit organizations. While donors may wish to keep their personal information confidential, nonprofit organizations argue that transparency is essential to demonstrate their commitment to ethical fundraising practices and maintain the public’s trust. Striking a balance between these two perspectives can be challenging, as both donor privacy and organizational transparency are valid concerns.

Potential Chilling Effect on Philanthropy: Critics argue that if donors feel their intentions are being scrutinized too closely, they might be discouraged from contributing to causes they care about. This fear stems from the idea that donors may perceive the due diligence process as invasive and overly skeptical. This perspective emphasizes the importance of fostering a philanthropic environment that encourages generous giving without unduly deterring potential donors.

Selective Acceptance of Donations: Some argue that extensive due diligence may lead organizations to reject donations from sources that may have had controversial affiliations or actions in the past. While this may be seen as a way to maintain ethical purity, critics point out that it could result in missed opportunities to redirect funds towards positive change. The debate lies in determining the appropriate level of scrutiny that aligns with an organization’s values while still capitalizing on potential contributions for the greater good.

Misuse of Donor Information: Organizations that collect and store donor data must ensure robust data protection measures to prevent leaks, breaches, or unauthorized access. Mishandling sensitive donor information not only jeopardizes donor trust but also raises ethical and legal questions about the responsible use of such information.

Uneven Implementation and Resource Allocation: The controversy surrounding donor due diligence is compounded by the uneven implementation and resource allocation across different nonprofit organizations. Larger, well-funded organizations might have the capacity to conduct thorough due diligence, while smaller ones might lack the resources to do so. This leads to potential disparities in accountability and transparency, which can undermine the sector’s credibility as a whole.

Conducting due diligence on donors is a critical practice that nonprofit organizations should prioritize to protect their values, reputation, and mission. While the process may require time and effort, it’s an investment that can lead to meaningful, sustainable partnerships with donors who are genuinely aligned with your cause.

By following these steps and staying diligent, nonprofits can ensure that their relationships with donors are based on trust, transparency, and shared objectives. The debate over due diligence on donors underscores the complex ethical landscape within philanthropy. While the practice is aimed at maintaining transparency, accountability, and ethical standards, it is not without its controversies.

Striking a balance between respecting donor privacy and ensuring organizational transparency, while also avoiding a chilling effect on philanthropy, requires careful consideration and open dialogue. As the philanthropic sector continues to evolve, finding common ground on this issue will be crucial in fostering a climate of ethical giving and meaningful impact. For an extensive list of due diligence resources please visit the Helen Brown Group’s Due Diligence Resources Page and let us know if you have others that we may have missed!

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