Monthly Archives: June 2010

Inputs, Outputs and Diversification

I was recently asked about funding for entrepreneurs as they get started launching their venture.  I thought it would be valuable to share my resulting thoughts here as well.

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Inputs, Outputs and Diversification

We often think of funding as amassing a lot of funds so we can get started. But what if it’s about using those funds effectively? Part of fundraising is about inputs and outputs. 

Think about the energy it takes to fundraise. Cultivating relationships, and long-term committed funders, takes effort.  So when you do raise funds, you want to make those funds really work for you. 

I’d recommend not ever leaving the mindset of bootstrapping.  If you focus on using those initial funds scrupulously, then you can spend less time fundraising.

My second main point is diversification.  Just as you would diversify your own personal portfolio with savings, checking, CD and stocks, so should you with your business.  That initial funding includes your own savings, the utilization of interns, probono services such as accounting or law firms, individual investors, institutional investors, corporate investors…

By having a strong mix, you protect your initial and long-term growth.  As one type of funder increases or decreases their involvement, you are able to rely on other sources.  Then marry that with scrupulous use of your funds, and you can maintain yourself successfully and consistently over the longhaul.

Part of the most exciting element of funding is not just ‘closing’ a win in funding. It’s about managing it correctly and making it last. It’s about the ethics of valuing the money you are given, as if it were your own (and often it is).  You can provide that same level of respect you’d give your own funds to those of an investor.

Seeking Excellence and Offering Forgiveness

This is a tough economy in California, with a 12.6% unemployment rate.  I am watching such smart, capable, ethical people search for employment with a very tough journey. And it compounds the situation when they are seeking a company of excellence in their chosen industry, one well known and with a strong brand, which also meets their expectation of values.  I admire each seeker who is striving to find that right fit which will allow him or her to contribute positively to themselves, the company and the world. 

One team member expressed grave concern over a company they had been pursuing who was well perceived within the community, but then seemed to be overcome with severe ethical issues.  It seemed to them that the company was now a complete failure.  Below was my response.

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Dear ______,* as you know, I am watching out for you and your adherance to values.  I agree that integrity is of utmost importance. As you know, I want you to find the right, and upright culture, which fits your values.  I admire your longstanding search to find a company that is well perceived in excellence in its work ethic, as well as excellence in values.

The article on COMPANY* speaks about its strong brand in this sector from a forprofit perspective, but not from a principled perspective. This is much of what we have talked about: Just because an organization is seen as best in class from a financial, forprofit sector perspective, does not mean that it has achieved a similar level in leadership and values. 

Having said that, we all make mistakes.  Recovery in life… is equally important. No failure in life is permanent. We all have areas we can improve, grow and recover.  And, I humbly say we should “all be allowed to recover.”  🙂

I hope that COMPANY does in fact achieve this new level of ethics and awareness.  It’s one of the most beautiful and humbling events in life when we forgive others (as we’ll often need to be forgiven as well.)  Equally important is allowing for people to improve and grow.  They can attain higher levels of truth, and learn to be better people, just as we are striving to do so in our own lives, too.

So my highest hope is that these very smart people will discover an equal intelligence in the area of both finance and integrity.  It doesn’t mean you should join the firm. As you know I want the very best for you…  But we can still wish them well and hope they will learn, just as we are learning…

I admire your dedication to the truth and finding a firm which will fit with your principles. I have no doubt you will find it.  And I support you each step of the way and look forward to seeing where you eventually decide.  The company will benefit greatly from your sincere intentions, and you will thrive in their culture, making it a wonderful win-win.   Please keep me apprised and thank you for sharing your thoughts!

Best, Pamela

*The team member’s name and the company’s name have not been revealed in order to preserve privacy.

“Donor Fatigue”, “Tired of Risky Investment” Fatigue?

Fundraising is key for for any social enterprise, but how do you handle donor fatigue?  That question was asked on Social Edge, with thoughts on how “Social Entrepreneurs Can Avoid It.”  I shared a few thoughts of my own, below.

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It’s sometimes hard to hear about donor fatigue because we all need donors. We appreciate them and need their sincere and strategic help. At the same time, we need to be very careful about repeated asks.

Building relationships with donors is about long-term relationships. That means sincerely caring about the individual and understanding about them holistically. To fundraise with true sincerity, it’s about listening to the individual and gradually getting to know who they are. What issues are they interested in, even if not related to you? Do they have family, hobbies, classes they are taking? What is important to them? It is not only being willing, but wanting to develop a longstanding relationship.

To be candid, we don’t always face this on the purely forprofit social enterprise side, because we don’t have “Make Money Fatigue.” For the most part people would like to make money. So even if investors are wornout in general by working a lot or reviewing a lot of deals, they most likely will hear another one because of the value add of a potential financial return.

On the other hand, if you’ve been burned numerous times in investing or made poor choices, you might soon get “Tired of Risky Investment” Fatigue or “Tired of Losing Money” Fatigue.

It’s certainly interesting to compare the two: fatigue of giving, fatigue of investing?

Back to the donors. Here, we need to understand what inspires them and hopefully keep them engaged in those areas. I remember once I fundraised from a gentleman with significant funds. He supported two new team members to help bring them on board. Next year, thinking he might want a creative change, I presented an aggressive marketing plan which could take UniversalGiving to exciting new awareness. He turned me down not funding a $1. He didn’t like marketing, and he didn’t like how hard it was to be measured.

But he liked supporting people. He would give money to pay for salaries, benefits — anything to keep good people. He was a multiple-time entrepreneur and understood good people make everything run! Next year I presented two key personnel and how they would achieve our objectives. I received the funding.

Key, however, is that my relationship with this gentleman didn’t change over those years, whether he funded me or not. I came to him for advice, insight and engagement. Keep the relationship, value the person, whether or not an investment is made.

So find what interests the donors, and stick with that long-term relationship. Part of your return to them is producing inspiring and compelling results. It makes them feel a part of something larger, and more likely to stay. For many donors, that is their return on investment.

Allow the relationship to move and change. You might keep in touch with someone for 10 years and they might fund you on and off for 6. That’s a good record! Keep the relationship, keep the sincerity, and always, always express appreciation for their involvement, no matter the form it takes.

Daily Prosperity, Starting with Me.

Now I know I have to figure out how to carve out more time in between my meetings, to get there on time. I am finding that in my ‘running’ to meetings, I am falling — full out on the sidewalk, arms splayed, bags spilled all over — about 1-2x month.

I’ve been a runner so I just get up and keep moving. This last Saturday was a tough one. I really banged my knee with a blood and bruise. People drew breaths as they saw me fly on the concrete. But having taken care of my 3 nephews and nieces at a very young age, I always tell myself, “You’re Ok!” I flash big smiles to all around that it didn’t scare me and I am more than ok. Then I stuff every scattered paper, pen, an orange, a book, my cellphone back in my bag and take off. Get there on time.

I did. My dear friend was late for coffee. 25 minutes. So I could recollect myself, but the process, the on the way, made me halt. I need to build on not only the importance of being present for others along the way but also, now, the importance of treating myself with the same care and respect as I do others.

It is not so fun to run and fall and be on time.

My next goal, is walk, smile, connect and be on time.

This is going to be a big one for me. Will I still be able to get all the heartfelt things done I need to? The organization and order which makes me feel peaceful in my home? The important partnership which needs to be follow up on for UniversalGiving?

I am going to trust that it will. Following a sincere intention to care for myself as I do others, I believe, will ultimately bring a higher sense of peace and daily prosperity in my actions….

<< See the previous installment of How This CEO is Growing, “I Choose to Run”

Commercial Values for Social Enterprises

A recent discussion on Social Edge asked the question “Can Social Enterprises Be Too Commercial?”  The conversation went on to explore whether certain business standards are simply too corporate for social enterprises.  Here are my thoughts on a few of the standards discussed.

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What we are really talking about here are values and culture. Each person is going to create, and find an environment that works best for them, at least in majority. I’d say some of the items mentioned are important in any realm, not simply as a social entrepreneur. This is specific and not absolute, so I find this interesting to break down some of the issues involved in each of these values.

1. Being on Time

Being on time is imperative and respectful. You can see my blog posts here under How This CEO Needs To Grow about how I have struggled with this, and yet also maintain a high standard the majority of the time.

Being on time is a value we hold for ourselves. For respecting not only our colleagues, but also family, friends. I’ve found when you are consistently on time as well, that you find a deeper sense of respect and grounding for oneself, too. I can’t really see a realm where it isn’t important.

2. Being Neat

This is a tough one! I love neat offices. It gives me such peace to walk into a neat office. However, people also need to feel as if their workspace can be individual, creative or simply protected as their own. I do think it speaks to the “state of the mind” of the organization. It can point to how organized they are in their priorities and clear objectives. Of course, this isn’t always the case. A purely pristine, logically ordered office might also lack the spontaneity, variety and creativity to pursue innovation.

I’d say here to do your best to keep it clear, and balance that with team member ownership over their space. However, when you have very, very open workspaces such as at UniversalGiving (we are all open-office format, I have a standup desk right in the middle of some team members and 5 or so interns), perhaps even more important that folders and areas are kept clean.

3. Being Too Commercial

This phrase strikes me as culturally severe. Commercial is all about selling and no heart behind the product. I’d like to say that we are run with business principles, balanced with a product that affects our communities. We “adore” what we ‘sell’! We are in the business of scaling giving and volunteering all over the world. We use business terms. We use heartfelt terms. We mix and balance.

Find what works best for your leadership and team, and the people to whom you best want to recruit. Maintain important principles, and also allow in clearly defined ways, where creativity and free rein exist.

Then enjoy your culture. Keep listening to yourself, to leadership, to the team. Watch how the culture evolves. Measure to see that it is in line with your values. And refine again. Cultural development for your organization is created every moment and requires that attention.

Enjoy the process!