The Phenomenology of Fundraising

In the earthquake zone that is the West’s coast, engineers pay special attention to the bottom floors and foundations of structures. Things have been done to those foundations and bottom floors over the years out of necessities valued higher than the necessity of preventing earthquake havoc.

In the San Francisco Bay Area, for example, the more readily available composites for bricks and ready means of transporting them (in barges across the Bay) engendered their wide use – especially after the 1917 earthquake – in foundations incapable of withstanding any ground movement. Strictly limited space, especially in San Francisco, Oakland, and Berkeley, made conventional the practice of having garages and wide open retail spaces as the first floors of apartment or commercial buildings, first floors into which floors above would be sure to collapse in the first seconds of the inevitable Big One.

What’s foundational to structure is fundamental to enterprise; and often we find that until a crisis occurs enterprises live on and expand for reasons and in ways that disconnect them from the fundamentals on which they were founded.

In commercial enterprise the most serious of those disconnections occurs between companies and their customers. The new book, The Moment of Clarity, by Christian Madsbjerg and Mikkel B. Rasmussen (Harvard Business Review Press) offers a variety of case studies in which companies discovered they’d lost their market moorings and started to drift. More valuably, the book introduces us to the methods through which each of them achieved their moments of clarity.

The Moment of Clarity is worth its weight in gold, unless you are an executive with a nonprofit organization who has anything to do with fundraising. In that case, it’s worth its weight in platinum.

My aim is to tempt you to read it.

In the nonprofit realm, disconnections can certainly occur between organizations serving people and the people they serve. But the more serious and common disconnections occur between organizations and those supporting them financially; and among those sources the most common and serious disconnections occur with individual donors. This happens principally because most donors are connected only through the mechanics of media and because for too many in nonprofit management, that’s good enough.

Madsbjerg and Rasmussen are founding partners of ReD Associates. Their work has transformed business strategies at companies like Intel, Adidas, LEGO, Coloplast and Samsung. The essence of their work is the disciplined application of human sciences to the solution of problems of disconnection between companies and their customers.

The human sciences – anthropology, psychology, ethnology, philosophy, and sociology – and their applications in art and literature deal with how people experience the world as opposed to what they experience, which is the realms of natural and social sciences.  Statistics of social and natural sciences can tell us with precision what people may do under the influences of their world experiences, like making a contribution, but our measures of response and sizes of gifts are not measures of the donor experience.

Does this matter? For as long the nonprofit sector in this country was a sellers’ market and organizations weren’t experiencing the acute pressure of buyers’ market competition, this distinction didn’t matter nearly as much. Ironically, organizations in the sellers’ market were far more inclined to state, as simply as possible, their cases for support in ways that engaged donors in those cases.

But we have now been in a buyers’ market for a long time, long enough to have also witnessed the ebb tide of one and the inflow of another generation of donors distinctly different from one another. And the buyers’ market has affected less attention rather than more to donor case engagement, and more attention to fundraising tactics and techniques.

The Moment of Clarity introduces many new or at least esoteric terms, all of them worth understanding and incorporating into one’s thinking about how to run companies and organizations more successfully. Two are central to the text. One is sensemaking. This is the authors’ term for the process of employing human sciences to solve complex problems of disconnection that are hard to conceptualize and articulate. They describe the skills and characteristics of sensemaker leaders in this way:

  1. Care deeply about the products and services they make or provide and the meaning that these offerings create for people
  2. Have a strong perspective on their business, one that stretches beyond the current horizon and the current company (or organization) boundaries
  3. Are good at connecting different worlds inside the company (or organization)

The second term central to the text is phenomenology, the study of how people experience life and the world.

The lessons for fundraising management from The Moment of Clarity, in brief, are that organizations don’t just need to re-brand themselves or re-create their marketing and fundraising strategies to raise more money. They need to understand the phenomenology of giving, or giving as a life experience.

Building codes inspired by events like the Bay Area earthquake of 1989 no longer allow brick foundations or open first floor plans without adequate cross bracing and what’s called shear-walling. The lesson learned is that an earthquake is not a disaster; the disaster is the result of not being prepared. The phenomenology of structural engineering is not in understanding earthquakes but in understanding the earthquake experiences of buildings.

Doing Good Well

There’s a lot of attention paid these days to seemingly out-sized compensation packages, of corporate CEOs, of professional athletes, of entertainers, and recently of high-ranking executives of nonprofit organizations (CEOs along with star program talent such as medical and artistic directors).

I wish Gretchen Morgenson would take on compensation accountability in the nonprofit sector. The Pulitzer Prize-winning New York Times business columnist has done significant public service drawing attention for nearly a decade to the connections between the fortune-taking of top corporate executives and the good they have or have not done for their shareholders.

Whether it’s in private enterprise, professional sports, medicine, the arts, entertainment, or charity, doing good while doing well needs to be done well to do any good. Whining or ranting about how well anyone does financially is a waste of energy better applied, as Ms. Morgenson demonstrates repeatedly, to assessing the good that they do relative to how well they’re compensated.

As irresponsible as corporate directors have been shown to be in tying C-suite compensation to actual productivity on behalf of shareholders (the good they’re hired to do), so have so many in positions to do the right things in the nonprofit sector been irresponsible about accounting for the good to which their organization’s mission and vision statements aspire.

Brian Fung, writing in the Washington Post April 30 made an important contribution to this discussion. He was reporting on the fact that the tech start-up accelerator Y Combinator has begun assisting start-up nonprofit organizations.

Although he said the inevitable, “The aim is to do good while doing well,” just four paragraphs into his article, Fung’s reporting wasn’t about executive compensation. Rather is was concerned with the business planning that is essential to accounting for good. Y Combinator not only introduces entrepreneurs to financiers – in this case philanthropic financiers – it is determined to set them, whether for-profit or not, on productive courses.

There is much to be skeptical about in the presumptions of Y Combinator’s approach.  As an example, Fung reports Y Combinator’s specific emphasis on “the power of [a nonprofit’s] own business model to survive, rather than on donations…[believing that] weaning nonprofits off constant fundraising will make them leaner and more efficient.”  That’s a short-sighted – albeit common – view of fundraising; but it also seeds opportunity for great mischief if entrepreneurs come to believe that for-profit-forged business models exempt them from keeping their financial wellness commensurate with the good that their organizations do.

Fung did not, of course, write the headline for his article: “Can Silicon Valley Teach Nonprofits How to Save the World?”  But he did write:

…at a time when Americans are growing increasingly distrustful of Silicon Valley’s swagger, the more relevant question may be what engaging nonprofits may hold for a tech industry that’s reached an uncertain adolescence.

Alas, in Silicon Valley more than most places on earth, opportunities abound for doing good, not just with the money being made but with how it is being made.