April 23, 2014 | Tom Suddes

ROI, Part 2

My friend and TSG Senior Partner, Jeff Strine, pointed out a glaring fault in my ROI thinking.

Jeff is a recovering banker. In the financial world, Return-On-Investment means NET. Jeff says it’s sometimes called NET CONTRIBUTION, which makes sense in our world as well.

Here’s Jeff’s example:

  • Gross Revenue: $2M
    Revenues Generated = 2X
  • Investment/Expenses: $1M
    Cost of Raising $1 = 50%
  • Net Return: $1M
    ROI = 1X … not the 2X I used.

I didn’t want Jeff to think I’m a financial moron, but I’m guessing that the net return of $1M or 1X would be a 100% ROI.

My bottom line: Your NET RETURN/ROI should be WAY MORE than your INVESTMENT/EXPENSES.

3X. 4X. 5X.


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April 22, 2014 | Tom Suddes

ROI

Note: Sorry. Been away from the ‘page’ for a bit. Back in the game. Always appreciate your feedback.

ROI. RETURN-ON-INVESTMENT. What every ‘Investor’ wants from their investment … and what every For Impact organization should want from its development/advancement/fundraising effort.

We’re doing a ton of work where this concept is completely absent or totally misunderstood.

With all due respect to the industry, I just don’t get it. An organization ‘invests’ money/resources in their development/fundraising operation (a one-person shop or 50 people in the college advancement division). I’m not sure how else you would measure productivity or success without making ROI the #1 barometer.

  • ROI is very simple to calculate. It’s a numerator/denominator math problem.
    Here’s how much money we raised (the numerator).
    Here’s how much money we spent/total expenses (denominator).
  • R (N) – TE (D) = NET, NET, NET CHECK/FUNDS to support IMPACT!
    *’Green’ people write checks to the ‘Blue’ people.
  • R (N) ÷ TE (D) = ROI and COST OF FUNDRAISING. 
    ***For example, if you are a hospital foundation raising $2M a year in ‘fundraising Revenue and your total expenses are $1M … your ROI is 2X or 100%; and your cost of fundraising is 50%.
  • There are two ways to increase your ROI and decrease your cost of fundraising:
      Increase the Numerator (Revenue)
      Decrease the Denominator (Expenses)

In our For Impact world, our own benchmarks are as follows:

  • 3X is minimum model/benchmark.
  • 4X is great.
  • 5X is something you should be very proud of.
    ***If you’re running a ‘Campaign’ within an existing development operation or as a separate initiative, I believe the cost of fundraising should be a ‘nickel‘ (five cents on the dollar). That would give you a 20X ROI.

If you are a For Impact leader, senior staff, executive director or a board member … I hope the above gives you some sense of comparison. Read more


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April 9, 2014 | Tom Suddes

The Dramatic Secret to Completing an Overwhelming Project–Fast

We have worked with the Abbey Theatre in Ireland and I have been backstage a number of times. And, I am also an infrequent but big-time lover of watching just about any Broadway play.

I thought this great article in Inc. by Kevin Daum, The Dramatic Secret to Completing an Overwhelming Project–Fast was superb. In essence, an eight-step completion process theatre pros have used, as he says, for thousands of years.

Here are the steps. Read the supporting text.

    1. Strip away the unnecessary.
    2. Plan slowly to move quickly.
    3. Grab the right team.
    4. Make a clear division of labor.
    5. Have brief but regular check-ins.
    6. Make use of elves.
    7. Build in time for testing.
    8. Accept what is good enough.

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April 8, 2014 | Tom Suddes

16 Leadership Lessons from A Four-Star General

Thanks, again, for Shane Parrish at Farnam Street for turning me on to General Stanley McChrystal’s memoir: My Share of the Task.

Here are a few of the 16 Leadership Lessons with my quick application to the For Impact world:

    1. Leadership is the single biggest reason for success or failure.
    Totally agree! Not just internal leadership on funding initiatives but external leadership/champions!
    2. Leadership is difficult to measure.
    McChrystal says, “Leadership is the art of influencing others.” Not about giving an order or managing. In my world, leadership is measured by impact and results.
    4. Leaders take us to where we’d otherwise not go.
    It’s the whole ‘VISION’ thing. And, attitude.
    8. The best leaders are genuine.
    In this case, leadership is the same as sales presentations … both require absolute authenticity.
    16. Leadership is a choice.
    Here’s his quote: “A leader decides to accept responsibility for others in a way that assumes stewardship of their hopes, their dreams, and sometimes their very lives.”

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April 7, 2014 | Tom Suddes

The New ABC’S of Selling

We at For Impact and The Suddes Group love Farnam Street and Shane Parrish. I really enjoy getting my Sunday compilation of articles, books and thoughts from Shane.

You’ve seen my thoughts on TO SELL IS HUMAN from Dan Pink. Shane has a very well-written take on that book and Pink’s thoughts.

The ‘New ABC’ is a reference to Alec Baldwin in Glengarry Glen Ross. Baldwin’s character was about ABC — Always Be Closing.

Pink talks about Attunement, Buoyancy and Clarity. (I think ‘Bouyancy’ is a stretch to define the ‘B’ word but it works.)

A lot of good, good stuff in this article that will help you better understand SALES and SELLING.

“The only thing you got in this world is what you can sell. And the funny thing is, you’re a salesman, and you don’t that.”Arthur Miller in Death of A Salesman.

You’re in sales. Get over it. The Old Guy


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April 4, 2014 | Tom Suddes

Why Fund-Raising Is Fun

My good friend Joe Breman (who, by the way, has his face plastered on billboards all over Grand Junction, Colorado for his work with St. Mary’s Hospital) sent me this article by Arthur C. Brooks, President of the American Enterprise Institute, which ran in Sunday’s New York Times.

Here’s the article, but here’s my take:

  1. The more you give, the more you get.  Tons of support for this axiom.
  2. Success to Significance.  Drucker’s great line.  Our role as For Impact Leaders and Development/Advancement Professionals is to help people with this move from Success to Significance.
  3. Impact Drives Income.  As always, this is the key to successfully raising money/funding/income.  The greater the IMPACT … the greater the OPPORTUNITY to help people find meaning, happiness, significance.

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April 1, 2014 | Tom Suddes

BREAKING NEWS … IRS ELIMINATES 501C(3) NOT-FOR-PROFIT DESIGNATION!!!

  • IRS ELIMINATES 501C(3) NOT-FOR-PROFIT DESIGNATION!!!
    The Internal Revenue Service has abolished their 1913 law that permits organizations to designate themselves as NOT-FOR-PROFITS.
    “This designation is contrary to all other industries, as it is the only one defined in the negative. In our usual show of logic and common sense, the IRS has eliminated this designation in the hopes that all ‘charities’ and ‘tax-exempt’ organizations will now focus on their IMPACT.” — An IRS Agent (who asked not to be identified)
  • FEDS MAKE DOING SPECIAL EVENTS (FOR FUNDRAISING PURPOSES) A FELONY!
    The Federal Government has ruled that there will be no more golf outings, galas and other special events that are not special and not events. *Signature Events and Memorable Experiences will still be allowed and encouraged.
    “This was the only way we could eliminate all of the events that were sucking up our time and energy and resources … with no real impact on our impact. Now I can blame the government when I tell our volunteers that we will no longer be holding Mostaccioli dinners or selling holes and tables for the golf outing.” — 1,840 Development Officers
  • SALES EXPERIENCE AND/OR ATTITUDE NOW REQUIRED FOR ALL SEARCHES AND ADVERTISEMENTS FOR DEVELOPMENT OR ADVANCEMENT STAFF!
    The Chronicle of Philanthropy has declared that it will no longer place adds for key Advancement or Development positions without listing a ‘Sales Requirement’.
    “While philanthropy is Greek for ‘friend of mankind’, the Editors of the Chronicle have finally come to the conclusion that all Impact organizations, and especially the Advancement/Development Teams, are in Sales. Get over it.” — Chronicle of Philanthropy Editors
  • 39 STATES BAN FEASIBILITY STUDIES! (Other 11 to soon follow.)
    States now require organizations to understand their purpose and priorities, do the math and be able to present the case and rationale for support, as well as where the funds will be used.
    *Leadership Consensus Building is still strongly encouraged and could be mandated by legislation by the end of 2014.
    “We have watched too many organizations spend huge amounts of money and time on consultants who are asked to go and present hypothetical campaigns with hypothetical priorities and asking for hypothetical gifts.” — Unidentified Governor
  • CFRE MEMBERS VOTE TO CHANGE THEIR NAME.
    By an almost unanimous vote, members designated Certified Fund Raising Executives have voted to change the name of their organization. A new name has not yet been presented, but the movement gaining the most support is to simply drop the ‘D’ in FUND!
    “I have been a CFRE since 1981 when it was founded. It has just hit me that the world has actually changed in the last 30 years. ‘Certified’ can mean crazy. ‘Fundraising’ is not the goal of any of our organizations. And ‘Executive’ implies that I am a ‘Suit’ in some ‘Office’ making (stupid) decisions.” — CFRE Member
    ***In related news, AFP will be changing their name from Association of Fundraising Professionals to Association of Forimpact Professionals, thereby still being able to use their acronym.
  • 300 THIRD SECTOR BOARD LEADERS COME TOGETHER AND DEMAND CHANGE IN VOCABULARY, NO MORE BOARD MEETINGS NO MORE COMMITTEES!!!
    Top philanthropists and community leaders came together under the auspices of the Gates, Skoll and Broad Foundations and demanded the following:
    • All For Impact Organizations must change their vocabulary! “We will no longer tolerate charities, donors, donations, solicitations, mission statements, warm fuzzy feelings, etc.”
    • No more Board Meetings! “None of us will attend Board Meetings that are bored meetings. We can read. We want to see, hear and touch the impact and results of our work.”
    • No More Committees. “The organization I’m working with has created a ‘Committee to Abolish Committees’.”
    *All of these leaders also agreed to actually THINK (bring their brain and experience) when asked to be On Board.
  • SUPREME COURT DECIDES ‘BLUE’ TEAMS AND ‘GREEN’ TEAMS MUST WORK TOGETHER!!!
    For the first time in recent memory, Supreme Court judges unanimously agreed on a ruling: Blue IMPACT TEAMS and Green SALES TEAMS must work together for the betterment of the organization. (The healthcare sector was identified as the primary example of hospital people and foundation people not talking to each other.)
    *The judges also ruled that any organization not working together and collaborating as a single unit will be declared a NFA. (Not-For-Anything)
  • CHARITY WATCH DOGS AGREE THAT COST OF FUNDRAISING EXCEEDING 95% IS IMMORAL AND UNETHICAL!!!
    Charity Watch, Charity Navigator and American Institute of Philanthropy also recommend that any cost of fundraising that exceeds 50% requires approval and sign off by every Board Member, the Senior Team and the Head of Development. Also recommend that cost above 50% be deducted from Development Staff salaries.
    “In UNCHARITABLE, I challenge this industry to re-think how it fundraises, especially around the idea that you need to spend money to make money. However, even I agree that 95¢ to raise a $1 is not good business.” — Dan Pallotta.
  • ‘JUST ASK’ IS DECLARED A GUIDING PRINCIPLE OF IMPACT SECTOR!!!
    From today forward, no one will be allowed to go on a visit without making some kind of ASK! OPPORTUNITY TO HELP must be presented on minimum of 80% of visits.
    “I do not want to be cultivated. At my grandparents’ farm, this was another word for spreading manure on plants. I do not want to be met with five times … without ever being told how I can help.” Every Busy Person on the Planet
  • ‘SOCIAL MEDIA’ PROVIDES ZERO NET DOLLARS TO HELP WITH IMPACT!
    Social media is great way for Facebook, Twitter, Instagram, Google and others to make loads of money … but creates no ‘net’ anything for 501C(3) Third Sector Organizations.
    An in-depth study by six of the leading internet research firms has confidently determined that Social Media is not the Panacea/Holy Grail/Greatest Fundraising Tool ever invented.
    Contrary to what hundreds of ‘experts’ (X = Unknown Factor in Math, ‘Spurt’ is a drip of water under pressure. Unknown drips under pressure?) tout on the internet [of course] … this is not THE way to generate huge sums of money.
    These research firms agree that, unless you are the American Red Cross using a text response for a huge, compelling disaster … there is absolutely no net income available to help with your impact (using social media as a fundraising activity).
    ***This study did show one notable exception: Bono and U2 have 13 million ‘friends’ on Facebook. That is the number determined as the minimal number of friends required to raise money through social media.

The best way to raise the most amount of INCOME to fund your VISION is the ‘old fashioned’ way … human contact!

APRIL FOOLS … the ONION … or a BRAVE NEW WORLD? YOU GET TO DECIDE.


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March 27, 2014 | Tom Suddes

THINK (Even) BIGGER!

We are working with some amazing organizations right now. And, with every one of them, we are asking pretty much the same question:

What would happen if you THINK (even) BIGGER?

Three pieces of yeast:

    1. “Let’s make a dent in the universe.”  Steve Jobs’ famous line.  Goes really well with his comment to John Sculley when he was trying to get Sculley to move from Pepsi to Apple.  “Do you want to sell sugar water the rest of your life … or do you want to change the world?” What is your “dent in the universe”?
    2. What would you do with $1M?  Here’s a great summarized/paraphrased story from the Napoleon Hill’s Think & Grow Rich.
    CIRCA 1930’s – A minister decided to do a sermon entitled, “What I Would Do With A Million Dollars.” He worked very hard on writing out his vision, his mission, his goals … and most importantly, an action plan to make his dreams a reality. He practiced his sermon for days, visualizing the impact he would have on the congregation. Sunday arrived. He forgot his notes, but gave his sermon with a passion and enthusiasm that is seldom encountered. Totally drained, he stood on the steps outside the church after the service. The first person to greet him was Philip D. Armour, a wealthy Chicago industrialist. Mr. Armour handed the minister a check for $1 million. And thus was born the Armour Institute … which became Illinois Institute of Technology.
    What would you do with $1M?
    3. THE MAGIC OF THINKING BIG. I just saw somebody’s list of the 10 best books, and this was on it. (Copyright 1959 and 1965) My copy is November 1975. Note: Price/Investment: $1.95!
thinkbig
    Dr. Schwartz talks about a ‘Big Thinker’s’ vocabulary, talks about focusing on large issues and not trivial details.
    Here’s a great line from the preface: ” … success is determined not so much by the size of one’s brain as it is by the size of one’s thinking.”

FWIW


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March 20, 2014 | Tom Suddes

Who Is Your Ideal Prospect/Investor/Customer/Client

I’m absolutely stunned, amazed and flabbergasted that so very few organizations and sales teams actually take the time to define what their ‘IDEAL PROSPECT’ looks like!  (This is just as true in the ‘FOR PROFIT’ world as it is in the ‘NOT FOR PROFIT’ sector.)

The IDEAL PROFILE is one of the most powerful TOOLS that we use during our IDENTIFICATION PROCESS.

Don’t blow by this one. It has created many, many ‘MILLION DOLLAR’ prospects… and INVESTORS.

Here’s the concept: if you can actually come up with a PROFILE of your BEST PROSPECT/ INVESTOR (Customer/Client) … then you simply have to MATCH this IDEAL PROFILE with REAL PEOPLE!

In essence, this IDEAL PROFILE would be a simple ‘list’ of absolute best characteristics of your PERFECT (IDEAL) PROSPECT.   In the For Impact world, this might include:

  • Unlimited Capacity
  • Commitment To The Cause (Kids, Education, Health Care, Cancer, Workforce Development, Disadvantaged, Etc.)
  • Engaged In The Case (Your Organization, Your Solution)
  • Geographically Impacted
  • Interest/Connection To The Priorities, Programs Or Projects

Note: You can come up with more than one ‘ideal’ profile. For example, for a Campaign, for a transformational gift, for a legacy commitment, for President’s circle etc. Read more


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March 19, 2014 | Tom Suddes

Definition of Success

PearlsBeforeSwine

I’m not a big Huffington Post reader.  However, Arianna Huffington came out with her latest book, THRIVE: THE THIRD METRIC FOR REDEFINING SUCCESS AND CREATING A LIFE OF WELL-BEING, WISDOM AND WONDER.

A recent column by Cal Thomas reviewed her book and mentioned that she had re-thought the meaning of a good life and found it to be something quite different than how it is portrayed by pop culture.

“The pursuit of money and power (she writes) didn’t satisfy after she acquired a considerable amount of each.”  

“There are still millions desperately looking for the next promotion, the next million-dollar payday that they believe will satisfy their longing to feel better about themselves, or silence their dissatisfaction.”

Thomas shared one sentence that reinforced so much of my own thinking on success, wealth, etc.

“Have you noticed that when we die, our eulogies celebrate our lives very differently from the way society defines success?”

______________________

Here’s my thoughts on the DEFINITION OF SUCCESS from 25 Wishes.

Remember, “WEALTH IS THE ABUNDANCE OF THINGS THAT WE VALUE.”


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