We have all had managers we love and those we dislike. I have finally figured out that the ones I did not like were those who misused their power. There’s a Greek Proverb that says: “The measure of a leader (manager) is how he or she uses power.”
Power misused is symptomatic of an insecure person who doesn’t know what to do. We should feel sorry for them rather than be angry.
But anger and frustration with managers is not only reserved for those who misuse their power. I often find that MGOs get upset with management when they are simply pursing values that are important to the organization.
I remember one situation where a MGO was so upset about “the demands of management” that he ended up alienating the manager, getting his focus off of his caseload, failing at his job and finally getting fired. Pretty sad. And not really worth it. All because a manager who, by the way, was a really good person, wanted the MGO to pay attention to some basic things that were important to the organization.
My reason for writing on this subject is to alert you to the important fact that most managers are reasonable and that the values they are pursuing are worth your attention and support.
Management values like…
- The caseload needs to be a certain economic value. This is about ROI (return on investment) and ratios. It is a reasonable expectation on the part of management to want to have a certain return on investment for the major gift effort. And that return ultimately needs to be better than direct mail and events, so higher that 1:3 or 1:4. So, if you add up all the expenses of your area, including your salary, benefits, support and operating costs, then multiply that times 3 for new programs, times 4 or 5 for programs in their second and third year and by 6 and higher for older programs, you should get to the revenue target that is reasonable to have. We have clients that have returns of from 1:6 to as high as 1:20! Here’s the thing. If the revenue return of your effort is low it will seriously affect the fundraising ratios of the organization, a value that is very important to guard. That is why management worries about this. But it’s not solely about the ratios. It is about securing as much money for programs as possible.
- Try to secure undesignated gifts. This is about flexibility and covering all the costs. If all that MGOs did was secure designated gifts, the organization would be in trouble. Why? Because there is a great deal of the budget that cannot be covered by designated gifts and program which, by its very nature, is changing due to client and environmental circumstances. Outfitting the math classroom of Mr. Jones in the Fairfield Elementary School of Corning, New York is substantially more specific than supporting math education in our educational system in Corning. While at the beginning of the school year the program people planned to outfit that specific classroom, as the year wore on it turned out that state funds came in to cover the cost. Where would you be if you had secured money from a donor in this case? It would be a problem. While designated money is often easier to secure, it is, most often, harder to manage. That is why managers want more undesignated money than designated money. One word about donors on this point: it is important to disclose this dynamic to the donor and most of them understand. They may enjoy supporting a specific project, but they will also recognize the need for the organization to be flexible.
- Include overhead with direct program costs. Overhead, before all the allocations take place, often runs at 20-30% of total cash use. I know, you think it’s 8 to 15%. It’s not. Believe me. And I could go on and on about how non-profits have backed themselves into a corner on this one. We have effectively sold the donating public on the myth that a non-profit can run on practically nothing and now we have a problem with them being upset at “higher” overhead costs. But that’s another post. The major point here is that management needs to make sure all the costs are covered. And what I always suggest is that they take all the overhead costs and spread them proportionately to the programs. So, if the direct costs of X program are $300,000, and that $300,000 represents 10% of the program budget, then the program should carry 10% of the overhead. Here’s how this works. Let’s say the total program budget of this organization is $3 million. The overhead is $750,000. Therefore the total organizational budget is $3.750 million. This $300,000 program should carry $75,000 in overhead (10%) meaning that, when presented to a donor, the cost of doing this program should be $375,000 not $300,000! A lot of people go nuts when I suggest this. One person recently said, “Richard, I just can’t morally add that kind of money to the program costs.” I said, “OK, Bob (not real name). Who are we going to fire? And we need to sell that building. And, by the way, those two vehicles, they need to go! Plus, you should outsource your accounting functions to save some money.” Etc. etc. I don’t know where we got the idea that running programs is only about the direct costs! Or that “charging” program with overhead costs is a moral issue! Crazy. It is impossible to run a non-profit without overhead, which is why management wants overhead covered.
- The major gift officer should be OUT of the office most of the time. The assumption is that you can’t be connecting with donors as you should if you are sitting at your desk. This is true and false. If you are talking to a donor on email or the phone, you can be sitting at your desk. But if you are sitting there most of the time, you can’t be having any face-to-face contact, which is also important. I have found that if the MGO is really doing his or her job, then this lack of understanding is about communication, not laziness or poor priorities. The MGO needs to communicate up-line that, in fact, your donors are being connected with.
- Don’t worry so much about credit. I am sure you have experienced this. You believe that you are supposed to get credit for a gift from a donor on your caseload and, wham, someone else does: the planned giving guy, the foundations person, etc. This one is a bit counter intuitive. On one hand, you need the credit to show that you are doing your job. On the other hand, a manager wants an employee who is a team player and not “always obsessed with what she gets”. My advice on this one is to watch your attitude and be a team player. If credit wants to be shared (you get soft credit and someone else gets hard credit), then so be it. Just move on. Believe me, it will play better with management AND they already know you are doing your job. If, on the other hand, you keep pressing and pressing on “this is my donor and I get the credit” you may win the battle and lose the war. Don’t do it.
- MGOs should work as team members vs. solo players. This one is sort of like #5 above, but it goes beyond the caseload and credit. This is about being flexible, caring for what happens to others and being willing to move things around on your caseload – like actually moving donors to the new MGO, etc. Managers want team players, not solo players. I have always had a management philosophy that the staff member who played on the team but had less technical skills was more valuable to me than the employee who was very skilled but had a rotten attitude. No manger likes a prima donna, and I have seen a lot of them in my day. Don’t be one. Play on the team.
- Manage expenses wisely and conservatively. This almost goes without saying. But, I often find MGOs who just do not watch how they spend the organization’s money and that does not play well with management.
Peter Drucker once said: “Management is doing things right; leadership is doing the right things.” And doing things right means paying attention to these and other important management values.