CEO Roundtable: Nonprofits

Donor fatigue, hiring strategies, relevancy – Springfield Business Journal Editorial Director Eric Olson sat down with The Kitchen Inc. CEO Meleah Spencer, Discovery Center of Springfield Inc. Executive Director Rob Blevins, The Child Advocacy Center Inc. Executive Director Linda Saturno and The Good Samaritan Boys Ranch CEO Kevin Killian to discuss the ins and outs of running a nonprofit in today’s world.

Eric Olson: In one word, how do you describe the current climate of the nonprofit industry?
Kevin Killian: Fluid.
Rob Blevins: Scrappy.
Meleah Spencer: Complicated.
Linda Saturno: Compassionate.

Olson: What is the biggest roadblock the industry seems to be dealing with?
Killian: Staying viable and relevant to your donors and clients. If you become stagnant, you’re going to lose all of those. If (nonprofits) are not willing to look outside the box, if they are not willing to change the way they do things that meet the need of all those people, then you’re not going to be viable very long.
Olson: What is a way to successfully not be stagnant?
Blevins: Decorate the box. You have to have a marketing budget because it’s important to stay viable.
Saturno: It’s staying on top of trends. We notice a percentage of children under the age of 6 that are victims of abuse and what that calls us to do is break it down even further. We have to be fluid in looking at our data and statistics of the people we are serving.

Olson: Do you have specific examples where your nonprofits have dressed up the box?
Saturno: Partnerships. So, it’s not only marketing for donors, but we also have to tell why they should be partners and how we are good partners and how we can help them achieve their missions.
Kilian: In order to keep your shareholders and your donors committed to you, celebrate your successes you achieve. Show your donors and your shareholders and the people who support you … what you’re doing to make a difference in somebody’s life and that it’s an actual person. It’s not a number; it’s not a statistic; it’s not this group of people – it’s one kid who has a personal story.

Olson: Do you think people care more or less about the mission today?
Killian: I don’t think that they necessarily care any more, but I certainly don’t think they care any less. I think they care differently now.
Saturno: I think of compassion fatigue. We hear about it from those of us in the industry. But is it possible that donors have compassion fatigue? When you’re a donor and you’re looking across the landscape of all the needs that are growing, there has to be a triage that happens in a donor’s mind. I can’t deal with it all, but what is the most pressing? And when I find those, are some (others) going to have to take the back seat?
Killian: I think that donor fatigue is a very real issue in our community, especially because we’ve got 2,500 nonprofits. Everybody is tugging on heartstrings, and everybody wants a dollar. I talk to a lot of people who say, “I am cutting back. I’m not going to support 100, I’m going to support 10 at a different level.” I think this community is inundated with nonprofits – not that they’re bad causes, there are just a bunch.
Spencer: We don’t spend enough time on the sponsor side of it and that loyalty. How are we able to create some great stewardship and loyalty? In the for-profit world, they do a great job at that. In nonprofits, we don’t always do the best.
Saturno: In Springfield, we are not just competing with other nonprofits. With social media, we are competing with global causes. I worked for the United Nations. Every child everywhere is deserving. But if you really look at your industry, it has become very complicated for resources because social media has made it that way.  

Olson: Do you have recent success stories and victories of fighting through that clutter?
Blevins: The thing we don’t need in Springfield is another fun run and chili cookout. A few years ago, I was on the board of directors for the Springfield Sertoma Club. I came up with a special event: the Springfield Prom. There was no adult dance party that benefited kids in Springfield. Make sure it’s something different than what’s out there. The first year, we raised just over $10,000.
Spencer: There is something to be said for great events because it’s not only raising money, but awareness. But, in the same amount of time, I could have gone and asked 10 donors for $10,000 and maybe come up with more money without having to create more expense and headaches on a staff that is already overworked.
Olson: What would you say to someone wanting to start a nonprofit?
Saturno: Don’t. They’re going to have to find a unique need. There are all these community need analyses. I say no, with a caveat: Unless you have done your analysis.
Killian: If you are committed to something, find somebody else doing it and support them. I can’t think of any need in our community that is not already being addressed. Instead of starting something new … offer your services and resources to make that one better. So I wouldn’t even put a caveat. I’d just say, don’t.

Olson: Are you suggesting nonprofits merge?
Spencer: In some situations, absolutely.
Killian: I think our mindset needs to be that we are not the end all, be all. No one organization has every answer, and we need to be willing to say, “We don’t do that” or “We don’t do that as well as they do.” I’ve been here 25 years as a CEO and to look at how it looked 25 years ago and how it looks right now is night and day. Twenty-five years ago, we all took care of our own. Now, we are looking for collaboration and looking for people to partner with. Would you rather give me $20 if I work with these four people and it’ll impact 100 people or give me $20 and it’ll impact my 10. (Donors) want to make sure that their giving mission is maximized.
Spencer: Haven’t you all seen more of that request – to the point where you will see it on grant applications looking for collaborations? That’s why I said “complicated” earlier. There are so many facets to nonprofits. Over the past 10 years of writing grant applications, they are looking for more collaborations than ever before.

Olson: How are those applications assessed then?
Saturno: In any category on a grant application, you have outcome measurement. That’s another skill set that doesn’t come to people who are social-worker-type people. It’s a business mindset. What are we going to measure and how are we going to measure that in a way that makes sense?
Olson: Does that effect hiring practices? Are you looking for people who are more analytical or come from business development?
Killian: If we hire the businessperson, we can fill in around them with other people. You better be able to run a business and you better be able to prove your business is viable because no donor in the world wants to be your last donor. They want to know their money is carrying out farther.

Olson: How much stock do you put into the accuracy of rating systems like GuideStar and Charity Navigator? Do donors bring that up when weighing decisions?
Blevins: People in the nonprofit world are moving toward whole business models where they think and act like a business, but then the world doesn’t treat nonprofits like a business. “You charge administrative costs? I’m not giving you any money!” That’s not how it works. We have to run a business and take care of ourselves in order to take care of the kids.
Spencer: It can start to get skewed if the donor and the media are looking at the (Form 990), and they don’t understand where the numbers came from.
Saturno: It’s always relevant. You can’t have too high administrative costs because that’s always going to be looked at. Making that shift where you can run a business and keep essential functions is challenging for us.
Killian: It depends on what your nonprofit is, also. I’m sure your staffing pattern doesn’t match mine. It’s always fluid, and you have to get to the point where you can explain that to your donors. If you have donors just relying on GuideStar, you won’t get those donors. When you have a $6 million budget and $2 million goes to salaries, people go, “Wait, how is this going to the kids?” But it is. All of it. You’ve got staff that are awake 24 hours, therapists, kitchen people cooking three meals a day for 120 people. That is something that can’t be written on a 990. It’s not something that most grants even ask. You have to kind of insert it in the appropriate spots so people do know what you’re doing and understand the challenges you’re facing.
Spencer: It’s telling your story. We have to be able to tell our story that fits our mission and take into account the story, whatever it is. 
Olson: I can see the challenges in looking for someone with a business mindset, an analytical-type person and the competitive salary there.
Saturno: Or not. If you’re in nonprofit, you’re recruiting a nonprofit person. I think there are people out there who could do the numbers and who have a nonprofit heart. You have to have a heart and a head. You can’t have one without the other. People who are in the nonprofit industry, we’re not in it to get rich.
Blevins: You find people looking to volunteer and then you get them hooked on the nonprofit world because they say it’s so fulfilling. We hear that with the generational change, with the way millennials see and think. There is a good market to recruiting there. That’s how I started out. I was spending nights and weekends helping kids and had that “aha” moment. I made the move, and now I’m pretty much stuck. They see a lifestyle – it’s not just a job. They want to be part of something that is bigger than themselves, and that’s what we can offer.

Olson: Nonprofits love millennials then?
Killian: It depends on who you are. It’s not to say we don’t love them. I think that depends on what section of millennial you get. A lot of millennials respond to different aspects of their income, benefits, whatever. It’s a balancing act of how do you work with that mindset.
Spencer: I understand generations are different, but I don’t always fall into the category with my generational theme. So I try to think of that person as a whole rather than what generation I think they will fall into. We are really quick to judge millennials as an employee, but we better get our act together because we are getting older. We need more donors and we need to gear up our next generation of donors.

Olson opens up the discussion to CEO Roundtable co-sponsors Aaron Emel of UMB Bank and Dan Derges of Mid-Missouri Bank, who are at the table.

Emel: According to Springfield Business Development Corp. data, we are at about a 2.7 unemployment rate. What is the No. 1 challenge for employment for nonprofits?
Killian: Being able to pay the going rate. I’m trying to pay people at $9.50 an hour and McDonald’s pays $10.50 an hour – plus they have to drive 25 minutes north and they’re working until 11 p.m. at night a lot of the time. They may make $1 an hour more, but it’s not as rewarding. To hire the people who are qualified and really good employees, it’s hard sometimes when you don’t have as many people looking for a job out there. We don’t pay top-end of the hourly rate, but I do offer 403(b) with match and 100 percent paid employee health insurance. It’s important to do that if you aren’t able to pay $15 or $20 an hour. We offset this, and that does help with retention. I have six employees that have been there 30 years. That is unheard of for that kind of tenure in residential care.
Saturno: If you have more than 100 employees, you’re able to get health insurance at a group rate. At smaller nonprofits, we can’t do that. We just hired more staff this year. At 31, it’s the biggest it’s ever been. But we don’t get that group rate until you get 50.
Killian: Collaboration on insurance I think is where we go in the future for smaller entities. We’ve talked about this at a state level, trying to find a company to marry the employee list.