Tear Down the Silos!

FundRaising Success recently hosted its second annual Engage conference in Philadelphia and a mini-version of it in San Francisco, where nonprofit practitioners lamented the high cost of silos and discussed ways to overcome them for the benefit of your cause — and your sanity.

It’s a subject worth tackling. Silos can stifle teamwork, frustrate donors, inhibit innovation and cost you significant dollars in net revenue. They can, in turn, weaken your programs and prevent your organizations from having the impact you want to have.

And as they calcify over time, they can get even worse.

As our friend global management and fundraising consultant Bernard Ross says, “It’s time to barbecue some sacred cows.”

There are different types of silos that can harm your organization. Do any of the following sound familiar?

Departmental silos
These occur when departments within an organization don’t communicate, cooperate and engage with each other for the benefit of the organization. Can you believe that some departments are reluctant to upgrade donors to monthly sustainers or major givers because they won’t get “credit” for their giving anymore? Have you heard major-gifts folks arbitrarily insist the direct-response people stop all communication with donors over $5,000 — even if the major-gifts team doesn’t have the staff to personally cultivate those most important donors?!

Solution: Put the donor first — organize your donor marketing programs around the donor. Let the donors tell you by their responses how they want to be communicated with. Don’t let any individual or department take turf ownership of the donor. Measure everyone’s success against the growth of the overall giving of the donor, not by individual campaigns. Encourage cross-functional teams to work on organizationwide challenges, where staff gets to know each other, gain exposure to other areas of the organization and perhaps even accept assignments on other teams. Establish common platforms and systems across the organization, and give people access to the same data and information. This discourages information hoarding.

Donor silos
These occur when you define donors the way you want to handle them. “Those are online donors — we can’t send them a letter!” Or, “Those are special-events participants — we can’t send them appeals.” Have you heard anyone say, “Those are volunteers; we can’t ask them for money”?

Solution: Donors don’t see themselves as online donors or special-events donors or volunteers. Meet them where they are, in as many places and ways as you can. Engage them through as many channels and experiences as possible. The more ways donors engage with you, the more bonded they are to your cause and the more valuable they are to your organization.

Budget silos
These occur when you see revenue and expenses as unrelated.

I was speaking about new revenue sources to a group of chapter CEOs of a mega-nonprofit. One raised her hand and said, “Last year you told us we should put return envelopes in our newsletter. Well, we tried it.” Silence in the room.

I broke the rule about never asking a question unless you know the answer in advance. “What happened?”

“It brought in enough money to pay for a whole year of newsletters!” she enthused.

Relieved, I probed, “Then what did you do?”

Barely able to contain herself, she said, “We did it again! And even more money came in!”

Elated that I was getting through, I went for the trifecta and pushed: “And then what did you do?”

“Nothing,” she replied, “because I didn’t have any more budget for envelopes.”

I actually thought she was kidding. No such luck.

I sputtered and stammered and asked the audience if it could help explain to her that if she was netting positive revenue from each effort, she could just take the money from the proceeds to pay for the reply envelopes. The entire room stared back at me as if I had two heads and agreed with the chapter CEO. There is a revenue budget and a separate expense budget. Even if something generates an extra million bucks, staffers can’t use any of those newly found dollars to roll it out to raise more, unless they have enough in their separate, preapproved expense budget.

Solution: Focus — and be measured — on growing your net revenue for program. Whether you need more spending or less spending, the measure of your success needs to be increasing net revenue for program. That allows more flexibility and the opportunity to pounce on new revenue opportunities without getting delayed by budgetary red tape. And, as any healthy corporation would do, consider the impact of making (or not making) an investment not just on this year, but over multiple years.

Organizational silos
These occur when you hold stubbornly to the belief that your chapter is unique, your organization is unique, your donors are unique or your market is unique. If other food banks’ donors have higher long-term value, if other hospitals have a larger percentage of monthly givers, if other veterans chapters have a higher percentage of company-matched gifts, it is too often (and too easily) explained away that, “Well, our donors are different.”

My friend Chuck Longfield, chief scientist at Blackbaud, compares it to health care. Can you imagine a hospital administrator saying, “Well, sure they use antibiotics to fight infection at that hospital, but our hospital is different”?

Yet that is exactly what many of us do every day.

Solution: Stop making excuses or settling for what you get. Compare your metrics (e.g., percent monthly sustainers, second-gift conversion) against the strongest results in your category. Determine the specific strategies and steps being taken by the top producer, and do the same thing. This is the lowest hanging fruit available to you and, if done properly, will generate significant net income that you can use to expand even further (if you paid attention to the above solution to budget silos).

Tom Harrison is chair of Russ Reid and Omnicom's Nonprofit Group of Agencies. He is also chair of the FundRaising Success Editorial Advisory Board. Reach him at tharrison@russreid.com or follow him on Twitter at @THarrison53