I want to ask you something… but be honest (with yourself…) Am I right that there is something unbelievably appealing (if not sexy!) about people who GIVE? Isn’t it so admirable…..?! Now go the other way…. say they don’t… they can, but they DON’T. Isn’t there something unappealing in this?! OK, but if this is the case (and without additional background information…) how can we say that being frugal is SEXY or APPEALING?!
Questions about being “Frugal” are good questions. Especially since most of us in the non-for-profit world work as a result of moneys that are contributions, hence we should be cognizant and sensitive on how we spend these moneys. But in the context of the appealing of giving… Is there anything less sexy than being frugal?
So while being sexy and being philanthropic may have something in common, where is the link between being frugal and being charitable? Or is being frugal simply dreadful?! Is spending a sin or is it the other way around? Are you getting a migraine and have you lost your passion altogether?! Wait – this is a discussion about philanthropy and not about something else.
Let’s see if we can move this (somewhat) complicated issue forward, by asking (yet) another question. What if someone is charitable and frugal? Can this work? Well, in the last decade or so, we have seen a rise of a new generation of major donors who come with an idea of managing their philanthropy like a “business”. While I don’t think that they are thinking in “frugal” terms the result is, in many ways, often managing (almost) every nickel and dime. Running cash flows, managing budgets, projecting expenses, requesting approvals on every expense etc., often things that we did not need to do in the past! Comparing this to what we used to do in the late 80’s and during the 90’s, this certainly feels different in terms of working with donors.
A couple of questions on the above: (for purpose of clarification)
1. Q: As a result of this new style of work with donors, do donors give us less money either for expenses or for charitable activities?
A: Absolutely NO! Neither for the first nor for the second.
2. Q: So if this is the case, what is the big deal / big difference between this way of running with the ball (donor’s moneys) today than a decade or two ago?
A: A HUGE difference! We spend the money more effectively and more business-like. Frankly, and I often/almost every day say it to donors I work with, I spend the money as if it were my own money. Learning frugality teaches us to run the business very, very carefully when it comes to spending money.
3. Q: Is this all?
A: No – Not at all! (more to come about changes in the Federation and inside culture).
This blog is focused on an area in donor development Steiner had a hard time not only in writing but many of us have a hard time in practicing: Managing and controlling spending (and whatnot) of other people’s money. Bold statement…but lucky for Steiner, and lucky for the internal mechanisms that the Pittsburgh Federation has… he could learn. And some of this is in this blog.
We are still left with the question of questions unanswered: Can we do philanthropy with a much tighter hand on spending and still be appealing? Can frugal be sexy in philanthropy too? Howard Rieger, who trained generations of us here in Pittsburgh would probably say: “Ask the donor”. Would you be comfortable enough to ask your donor the following: “Here is what I have put together for you. I am titling it as a draft. Is this appealing enough for you and me?” “Should I continue to work on it?” Hint : Do we have a choice ?!
For this blog, you (my readers) and I personally owe a big thank-you to Ron Lieber, a writer at the New York Times. Ron published an article on August 20, 2010 titled: “How to be Frugal and Still be Asked on Dates”. When I read this article, I finally had the guts to write this blog about a topic in which I found it hard to get myself to openly tackle.
I also need to make clear one more point on being frugal and sexy. In the reality of working for a non-for-profit, “being frugal” to my mind has to do very much with the strength of one’s financial management. A moment of honesty: before joining the Pittsburgh Federation, most of my experience had been in marketing, management and work with major donors. Work that included the financial responsibility is something I had to acquire first at JDC (in Moscow, Russia) and later here at the Pittsburgh Federation. In this area, I was especially privileged to work in the last 12 years with 3 individuals (Harvey, Milo and Tracy) who have taught and mentored me, instead of taking an approach of superiority in an area in which I knew so much less than I know now, both in finance and the management and responsibility of financial affairs. They have always had an approach of “open door”, and were always there to help and teach me how to do things better without making me feel bad. Without even feeling that I had growing pains, they made me grow. They are the most learned and team-player individuals I have ever worked with. When I deal with helping donors manage their philanthropic endeavors, this is an important asset in which I can rely – the strong support system behind me that I can count on and know will help me face the financial challenges out there. If this sounds to you as just a manifestation of “being nice” – check this fact out!
Much of this frugal/donor development/sexy was up until now nice and mostly easy. Is it all a smooth ride? Are there challenges along this ride of staying frugal and still appealing to our constituents. ABSOLUTELY! I could name a few… I could give you more than a few!!!
For one, part of what we do has to do with touching places never before touched, with excitement, with surprise etc. If you really think that this can be done by being constantly “frugal” …well… we need to have a talk :- )
Also, just for you…I am including the following example, one of many from when I managed to work things upside-down. Frugal, schmugal… things just did not work out right for me and I managed to do the wrong thing. See if you can figure out what you would do and what I did do!
I am traveling with two donors on a trip. In that trip, which is accomplished in some very generous ways, we are going to a restaurant which is good yet a relatively expensive one. Not high-end, but expensive. You get the picture, or maybe not: $150 per person with wine. This dinner is scheduled towards the end of the trip (the last evening) and 3 professionals who were part of the planning & making of the overseas trip and thus were an important part of the trip are asking to join the dinner as a surprise to the donors, and as a way to say thank you and good bye to the donors who are leaving the next morning to go back to the US.
What do you do? You ask the donors ahead of time for permission to have the extra guests? By that you ruin the surprise… You table the tab on these 3 additional professionals (the Federation pays for them)? To the donors you just upped the bill by about $450. You take on the extra sum to the Federation? You don’t allow them to join the dinner?
I am letting you debate this question before I tell you what I did and how this ended (badly…).
This blog is not so much about providing you with answers to a list of questions or situations (although it could be fun for you). I would like you to see some of the issues we face. And I would, more importantly, like you to see the options you have on how to approach and handle these same issues.
The key question to ask here is what is more important – isn’t it? The damage from not inviting the 3 additional professionals? The damage from surprising the donor with an extra cost? The damage from taking the extra cost to the Federation? What are you willing to “buy” as the minimal “damage”? Maybe, when the discussion, which started with something nice such as surprise guests at the concluding dinner of an overseas trip with your major donors, you will “just” come to the conclusion that the entire problem is about COMMUNICATION! That your best strategy is to approach the donors and share with them that 3 of the professionals are asking if they can join for dinner tonight and leave it up to the donors to decide. Let go of the burden and allow the donors to have their say. Their money – their call. You want to pay? Don’t ask and go ahead and pay.
Can you guess what I did?! I am sure you can :- )) I invited the guests without asking the donors… and was scrutinized afterwards since the donors felt compelled to pay for the additional guests as well but were surprised, and rightly so!
So what do you need, to not lose sight of your sex-appeal, and yet be in tune with the times of spending less…hence, being frugal? Here are couple of suggestions from what I see in the field and things that work for me.
1. Work on having an excellent flow of learning opportunities from the financial team inside the organization you are part of. If there is one lesson learned in this blog it’s about how essential it is for the output of an organization to build a learning work relationship between the development team and the financial team inside an organization. Being frugal and strong means learning from the strengths of your financial team.
2. Share, Share, Share. You would be surprised how many times I have enjoyed the additional pair of eyes of someone else when not sure about expenses. Different people see different things. It does not necessarily have to be in your “chain of command”. It can be from the team in number 1 above. It can be someone else in the development team. It can be someone from your organization, or often it is the donor that I consult with when I am not sure about something and seek her/his insight. Your hesitation is an asset not a weakness. You are seeing something…not missing something!
3. Surprises – In the good old days, surprises used to have a price tag attached to them. The atmosphere was much more loose and there was not much of a problem with the spending that went along with the cost. The marketplace of philanthropy is different, as is the appropriateness of “surprises” with the price tags that come with them. If you feel like surprising a donor that has a price tag attached… FORGET IT! Trust me, I tried it enough times to tell you that it ends painfully no matter how amazing the surprise is. Here is the advice though: You have to funnel your surprises (the sexiness!) towards things that don’t have price tags attached to them, while having all the things that do have a price tag be pre-approved by your donors.
This has to be loud & clear: Expenses need to be pre-approved!! Don’t surprise anyone! And if I wanted to be rude about it, I would write that this is about being sexy, not about screw-ups.
4. Let the donor run the expenses and pay them directly. We used to pay many of the expenses of the donors through the Federation and through projects. Makes it hard to be efficient and hard to demonstrate it. No one knows better than the donors themselves how to best be frugal with their own resources. Why not let them run this by themselves. We have been doing this more and more, which enables less friction and more control of our own doing.
5. Transparency is a famous word all over the place and when it comes to our work with donors, but it is also important in the work we do with their charitable work. Let them see what you do, how you come up with your decision, say things next to them, and invite them as openly and as frequently as you can to be part of the process (scary?!), so that they can see that you indeed run their affairs in a frugal fashion. This goes back to working like a business… they are your business partners (or investors) in many ways, and that requires them to see how you work, and how you come up with your decisions, but if you don’t feel comfortable in this environment… well… they will take their money elsewhere or seek to replace you.
6. Lastly – and I have already alluded to this — make the donor your teacher, your mentor. Let your donor teach you what is the best, most efficient way to be frugal with their money and even … (Yes! You guessed it J)… how Sexy you need to be while being frugal with their money. Sound “sick” ?! Not really; really practical.
Where is being frugal an uphill battle (and a curse sometimes) and where is it a blessing and the best thing that happened? I would dare to answer: if you go home and you also manage your home affairs this way… you’ve got your answer! Or in other words (along the line of that famous expression): don’t do to others what you would not do to yourself.
And good luck in staying attractive in what you care for.