CNM President Lewis Lavine issued a retort which ran on page 33 of the June 18th edition of the Nashville Business Journal:

Last month, more than 250 nonprofit leaders attended a conference sponsored by the Center for Nonprofit Management. The keynote address was delivered by the author Dan Pallotta, who connected intellectually with his audience by stating that nonprofits should be evaluated by their outcomes rather than by a set of contrived financial indicators.

After hearing his arguments, I was discouraged to read a local headline last week “Nashville Nonprofits Get Low Marks for Efficiency.” The accompanying article was quoting a new study by Charity Navigator, a New Jersey-based evaluator of nonprofits.

Charity Navigator selected only 30 large Nashville nonprofits for its study. From these 30, it concluded that Nashville’s charitable community ranks 26th among the thirty selected cities nationally. A key indicator in the study was that this Nashville group spent 12 cents to raise $1 in contributions, while the national median was 10 cents. Another indicator was the level of the salaries earned by these charities’ CEOs.

Nowhere in the statistics used by Charity Navigator is any measurement of the results or outcomes of the labors of our nonprofits. What these nonprofits accomplished in our community is not relevant to these evaluators.

Pallotta, in his Nashville speech, told a tale of two soup kitchens. The first was dirty, poorly run, served barely edible food, and catered to a small group of needy souls. Its CEO was poorly compensated, and it had very little expense in its fundraising program. The second was a clean, modern facility, efficiently run, with excellent programs and nutritious food, and a large number of clients whose lives were changed through its outreach. The CEO received a fairly high salary and performance compensation. It spent money on its fundraising campaigns, but was successful in its efforts.

According to evaluators like Charity Navigator, the first soup kitchen would receive a higher rating.

We have just witnessed the largest flood in our history. Our nonprofit community has gone above and beyond its means in caring for those in need. An example is the Community Resource Center that was itself destroyed in the flood. It continued to provide goods to those whose homes were destroyed. Another is Hands on Nashville that made 15,000 placements of volunteers within days after the disaster. Neither was included in the Charity Navigator study.

So let’s evaluate the performance of our charitable and nonprofit organizations. But let’s do so using indicators that matter – let’s example what they accomplish every day in our community.

 One of the huge takeaways of the day came from keynote, Dan Pallotta. Dan brought forth many new ideas for our sector to explore. Anyone in the room could see that there were light bulbs going off in brains throughout the Curb Event Center during his speech. Some of his major points included:

 1. “Feel-Good” Benefits of a Nonprofit Career are Overrated

Pallotta argues that medical researchers, book publishers, and environmentally conscious companies all feel they are giving back to the world and are not asked to sacrifice quality of life. Nonprofit employees are often working in typical office environments and are not the volunteers on the front lines helping the community. Therefore, the majority of nonprofit employees are not getting the feel-good benefits of daily service. In addition, board members and funders have considerable power over nonprofits, while those individuals have for-profit employment. They are also getting to experience service without sacrificing their income.

 2. “Overhead Costs” are Crucial to Fulfilling Mission

Culturally, we have been trained to ask the question, “What percentage of my donation goes directly to the underserved?” Pallotta argues that this is the wrong question to ask and is perpetuated daily by the media, state attorney generals and organizations like Charity Navigator and the Better Business Bureau. He states in a blog post, “The next time you’re pressured to keep overhead low when you know it will compromise effectiveness, explain that doing so is a violation of your conscience, your ethics and yourself.”

 3. People Want to Be Asked to Do the Most, Not the Least They Can Do

Why is the person who spends 99% of their time building personal wealth and 1% of their time on a charity board called a philanthropist and individuals that give 100% of their time to building a service organization are called “staff”? Pallotta believes that our definition of philanthropist is too limited to the wealthy class, and therefore, small donors never aspire to be more. We are making giving to charity easier every day, but what we need to do is ask donors to do more than send a text message to give a small amount.

What Are the Next Steps?

CNM would like to explore with the Middle Tennessee community how we further this discussion. What do you think are the next steps in this conversation? Should we even be having this conversation? Tell us what you think in the comments section! We promise to put your ideas into action.

• Valuable insight from recognized leaders on what is necessary to maintain excellence in terms of clients, staff, donors, board members and the larger community.
• Networked with peers.
• Achieved a sense of renewal and refreshment.
• Attended a comprehensive training event without travel and at an affordable price.

Nancy VanReece of Cool People Care was kind enough to serve as our social media volunteer, and in addition to tweeting the conference, also put together this fantastic video with her flip camera:

Special thanks to Nancy and to all of our volunteers that helped out last week!

The Junior Chamber has teamed up with nearly a dozen other young professional groups, including CNM’s Young Nonprofit Professionals Group, to host the forum, which will take place at Lipscomb University.

Please click here for a flyer with registration information.

José Gonzalez and Renata Soto are leading the breakout session “Rumba Roast Fair Trade Coffee: An Exercise in Social Entrepreneurship.” The session will highlight the story behind Rumba Roast Coffee. This fair trade organic brand was launched in 2007 by Conexión Américas, as a mission-related fundrasing endeavor with the support of Belmont University and Bongo Java Roasting company. The impact of this venture is felt both in Latin America and in Middle Tennessee. The fair trade coffee empowers farmers in Latin America, allowing them to get a fair price for their quality coffee; in turn, the sales from the coffee in Middle TN support Conexión Américas programs. Learn from their experience with social entrepreneurship, and walk aways with ideas of how to earn money for your own nonprofit! Click here to read more about Rumba Roast coffee. Continue reading for more information on presenters José Gonzalez & Renata Soto.

José joined the faculty at Belmont University in 2007 where he is an Instructor of Management and Entrepreneurship in the College of Business.

José is also the Co-founder and Past Executive Director of Conexión Américas. Conexión Américas is a local non-profit organization seeking to promote the economic and social integration of Hispanic families into the Middle Tennessee community. Conexión Américas plays a key role with private and public organizations by increasing and promoting cross cultural awareness with the Hispanic population.

José graduated from the Instituto Tecnologico Autonomo de Mexico (ITAM) in Mexico City with a degree in Accounting. He earned his M.B.A. from The Jack C. Massey Graduate School of Business at Belmont University. His business experience includes working in financial management roles for Organization BAMA and Procter and Gamble in Mexico City. He is also the President of CIMA Financial Management, LLC, where he consults for various entrepreneurial ventures.

Most recently, Jose’s particular interests in Social Entrepreneurship and Economic Development lead him to embark on a Service Learning imitative with Belmont students working on a variety of projects involving coffee and honey farmers in Guatemala.

Renata Soto is co-founder and Executive Director of Conexión Américas. She is from Costa Rica and has lived in the United States since 1993. She has been in Nashville since 1996. Renata has always worked and volunteered for social and economic justice causes. Once in Nashville, Renata worked for United Way of Metropolitan Nashville for more than five years. She managed a grant-making portfolio of almost $1.5 million, including that United Way’s first grants to programs serving immigrants and refugees. In her last role at United Way, Renata was director of an initiative to support and expand a network of family resource centers in low-income neighborhoods in Nashville.

 Renata was recently appointed to serve on the Board of Directors of the National Council of La Raza –the largest national Latino civil rights and advocacy organization in the United States.

Currently she serves on the Mayor’s Advisory Council on Immigrants and Refugees and on the steering committees of Nashville for All of Us and of the Coalition for Education about Immigration. Renata is also a member of the Board of Directors of the Center for Nonprofit Management and of the Tennessee Justice for Our Neighbors Project. In addition, she serves on the board of trustees of her children’s school, Abintra Montessori School.

Renata obtained a bachelor’s degree in Communications from the University of Costa Rica. She also attended Kenyon College, in Ohio, as a one-year visiting student and did graduate coursework at Georgia State University, in Atlanta, Georgia.

The Panel that was kind of enough to give their time today included Margaret Dolan of Ingram Industries, Andrea Smith of Bank of America, Kaki Friskics-Warren of The Dan & Margaret Maddox Charitable Fund and Jennifer Cole of the Metro Nashville Arts Commission. During the session, all funders stressed that  collaboration of some kind is seen as a huge positive. Last year, CNM partnered with Lipscomb University for a conference entitled “Collaborate for a Cause.” Nonprofits coming together with businesses, community partners and each other has been a common theme for awhile on the blog, so I thought I would link to some blog stories in the last year that offer great examples of collaboration. Check out the stories below:

We Can All Answer Call to Enhance, Serve Community

Mayor’s Office Collaborates with Hands On Nashville for Emergency Volunteer Needs

Now That’s What I Call Collaboration…

What We Learned from Listening to You

Nonprofit Collaborative Seeks Partners to Anchor South Nashville Community Center

Monroe Harding Joins Forces with RSI

Local Nonprofit Arts Groups Adapting to New Climate

Safe Haven Demonstrates Collaboration with For-Profit Partnership

Tell us in the comments section about other great collaborations that are happening in Middle Tennessee!

Road to the Conference: Featured Presenter, Amy Lynch

Generation Y and Economic Crisis: What you can expect from your Millennial employees during economic crisis, and what you can do to keep the Gen Y talent you need.

Despite their reputation for being pampered, a close look at the Generation Ys (a.k.a. Millennials) in your company may reveal more pragmatism than privilege. Recent surveys reveal that since 2006 Millennials have become more realistic about job expectations. In fact, Gen Ys have the lowest expectations of all four workforce generations when it comes to “soft” workplace benefits such as a pleasant work environment, liking the people they work with or having flexible hours. Here’s why.

Fiscal realists

Few of today’s 20-somethings escaped childhood free of financial worries. The oldest Millennials were born in 1980, right after the Japanese finished eating our industrial lunch and just in time to learn the new verb “downsizing.” Millennials were toddling off to preschool in 1984 when the Bureau of Labor Statistics first began to record worker displacement in response to widespread layoffs. They were in elementary school when their families experienced 1987’s Black Monday and the recession of 1991. During junior high and high school, they watched the dot-com bubble go full cycle from boom to bust. Then came Enron and 9/11 –and all of this before the economy began its current vertiginous dive.

Generation Ys have never experienced a sustained period of financial prosperity, and they have no memory of job security. They don’t even expect social security to be there for them later on. In one study, young adults said they believed they were more likely to see an alien spacecraft than ever to receive a social security check.

Then there’s debt. Median credit-card debt for low- and middle-income Millennials is $8,200. The average college debt for recent grads is more than $20,000 and rising. About half of all college grads go home to live with Mom and Dad for about a year after they leave school. Cheap rent beckons.

How will they respond?

Given all that, how will the 20-somethings in your company respond to this economic downturn? Given their history, they won’t exactly be surprised if you have difficulties or have to lay people off. That said, they might just be the LAST employees you should lay off during hard times.

According to Willliam Strauss and Neil Howe, authors of Generations: the History of America’s Future, history runs in cycles, and the U.S. is due a grim crisis right about now and, here’s the good news, a generation that rises to the occasion. Like the Greatest Generation that fought World War II, Millennials, say Strauss and Howe, are destined to take this crisis in stride.

What epic qualities will many Gen Yers bring to business during tough times? Try optimism and hard work. You’d expect a generation raised on insecurity to be cynical like the Generation Xers who preceded them, but that’s not so. Prodigious volunteers and politically active (look at the record numbers who voted in this election), 20-somethings tend to bring can-do confidence to big problems. If you think of this group as trust fund babies, think again. In 2006, 37% of Ys between the ages of 16 and 19 held jobs.

What you can do

On the whole, America’s nearly 80 million Gen Ys may weather this crisis to emerge on the other side as smarter business people, cannier entrepreneurs and better bosses and employees.

If that’s the outcome you’d like to see from the Gen Ys you employ, share information with them freely. Don’t let them hear news about your business or your industry from anybody else first. Info is the air Millennials breath. They respond to lots of info, even bad news, with trust. And trust creates loyalty.

Heavily scheduled and conditioned to achieve since childhood, Gen Y employees are natural multi-taskers well prepared to handle extra work. Tell the young people in your firm that it’s time to be entrepreneurial inside the organization. Ask them to show you how they can be useful and what extra projects they can take on. Expect them to rise to the challenge, and many of them will.

Be prepared to follow their lead. Because they’re so heavily networked, Millennials are the people most likely to scout out new trends, ideas and markets first. Charge your Ys with finding solutions that will see your business through the crisis.

Finally, put your mentoring programs on steroids. Link Millennials with Greatest Generation veterans and your most experienced Baby Boomers. These powerful pairings with professionals who have seen hard times before will enhance loyalty among the Gen Y talent you want to retain at a time when you need it most.

This article is featured on Amy Lynch’s Web site: www.bottomlineconversations.net.