Lies, damned lies, and huge Excel reports.

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I was in a meeting the other day trying to figure out a particularly thorny issue. We had a group of smart, experienced, opinionated people in the room -- my kind of meeting.

About halfway through the meeting, one of the participants produced a huge, multi-page Excel print-out. Many of the pages had colored graphs, three or four to a page. A second set of pages contained an assortment of tables correlating variables against one another. An accompanying narrative outlined that there was a "significant" relationship between some of the variables because the correlation coefficient was over .5.

​"As you can clearly see from this graph..."

We all kind of sifted through the print-outs and gave them the old college try while the presenter tried to narrate. ​After a few minutes, it was clear that none of us, including the presenter, understood what the graphs meant. There was no description of the units or explanation of how they were derived. And so what happened was everyone started to use the graphs to explain their own point of view: "What I think they mean is..."

​It was humorous, really, and luckily we all noticed it and started laughing and threw the spreadsheets aside. At the same time, the experience was a good reminder of how easy it is to manipulate -- and be manipulated by -- numbers. 

A few tactical takeaways:​

  • Label graphs clearly for your audience, not for yourself. Provide notes if the graphs aren't clear -- but if the graphs aren't clear, rethink whether to use them at all.​
  • Be careful of comparing correlations of a huge number of interconnected variables. In many systems (datasets), the variables are correlated with each other -- that might be why you are studying them in the first place. So comparing a correlation of .5 to a correlation of .6 and calling the latter "better" is more than a tad sloppy and isn't the whole story by a long shot. Variables interact. To study the interaction of a number of variables, look to regression analysis instead.
  • "Significance" means something very specific in statistics. It is not the same as "strongly correlated."​ When two things are correlated, it means they vary in relation to one another. That's it. A correlation does not answer any questions about the causes of the relationship. When a relationship is "significant," it means that there is a very low probability that the relationship has occurred by chance. Two variables could have a low correlation with high significance, or a high correlation with low significance. Think of it this way: You might have a great night on the town with someone you hardly know; in the same way you might have a really lousy day with your closest friend. How well the date went is not the same as how close your relationship is. (IMPORTANT NOTE: Significance will increase with the population size, so with large datasets you can find that all the relationships are significant mathematically even if they have no practical significance at all!)
  • And most of all, this hopefully (?) goes without saying, but don't base decisions on a report that no one can understand!

Averages and outliers

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My head is still bursting from last week's excellent Run-Walk-Ride Fundraising Council Conference. ​This year the conference was more vibrant than ever.

One reason was that this year's gathering was the largest ever; more people mean more opinions, more interaction, and more overall passion. I think there was something else, though -- as economic conditions slowly improve, I get the sense that nonprofits are ready to get moving again. It has been a slow few years, and there's a healthy impatience in the air. 

​Event 360's Suzanne Mooney has written a nice recap of the conference on our blog. And as usual, we've published a fantastic infographic of this year's results; the astute reader will note some interesting trends as compared to last year. 

For my part, I was grateful for my annual opportunity to address the entire conference. This year I pulled back from my usual tactical advice and outlined a larger imperative I see: The imperative to start swinging for the fences again. After five years of playing it safe, it is hard to see the continued benefit of conservatism. Our most powerful advocates, like the most powerful ideas, are on the fringes -- and so playing to the averages isn't going to get it done.

I have a chance at this year's NTEN Conference to expand on this theme in a lot more detail, and I'm looking forward to doing just that at the somewhat-awkward time slot of 1:30 p.m. on ​Saturday, April 13. I hope to see you there.

All the way to zero.

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It has been a rewarding and busy quarter for me. Already this year I've had quite a number of intense, immersive meetings with our nonprofit clients.

Growth has been the central theme of every meeting. There's optimism in the air again, and groups are looking out of the bunker window-slit to try to decide what to do next.

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Our engagements include a review of current growth forecasts (along with, eventually, a heavy bit of re-engineering of those forecasts). When I pull up an organization's spreadsheet, I ​almost always see that some number -- 4%, 8%, 12% -- has been added to last year's results as "baseline growth." When I ask where that number came from, I invariably hear that it came from the C-suite. The more frustrated staff will roll their eyes; the ones plucky enough to play along will say, "Our normal expectation is growth." I've had this experience a number of times this year. 

​This will sound a bit harsh for a Friday, so bear with me: The normal state of things is not growth. It is decline. My skin will not get better as I age; my 401K will not automatically double every five years; my Betamax video recorder will not be cutting edge technology indefinitely. 

Even worse, it is very possible to take things all the way to zero. It happens quite often, actually. Remember Bear Stearns? Palm? Hostess? Blockbuster? Small errors can create massive problems. Small issues can mushroom into monumental failures. My house could end up being worth less than my mortgage. 

We've all lived through a massive, five-year economic example that demolition is quicker and more definitive than construction. And yet I fear we may have missed the lesson. 

The natural state of your program is decay. This is especially true in fundraising, where  participant and donor retention might be 30% or less. In other words, we need to replenish 70% or more of our constituents just to stay even. Making no changes to your fundraising program -- or worse, pulling funds and staff from it -- will speed the deterioration. 

This is a great time for fundraising because as the economy picks up the results of the entire sector will pick up. But please don't let that convince you that you can put things on autopilot. "Organic growth" is seldom organic and almost never comes from just riding a wave. Growth comes from hustle, ongoing investment, and constant innovation. When I hear nonprofits say they are going to "take a conservative growth strategy" I get a nervous twinge, because it is usually code for "we're going to wait and hope." 

Waiting and hoping is not conservative -- it is incredibly risky, because it will almost certainly accelerate your decline. And it is a patently irresponsible strategy.​ It's time to get out of the bunker. Investment is your most sensible approach. 

If you're game, I'm going to bravely take on this topic – and a few others – in thirty minutes or less at next week's Run-Walk-Ride Fundraising Conference. I hope to see you there. 

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Livestrong shows us how it's done.

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Everyone knows that Livestrong​ hasn't had the easiest go of it lately. And so I was interested to see what I'd find at last night's Livestrong Assembly reception and dinner in Chicago. (I was actually quite touched to be invited – we've worked with Livestrong in the past, but it's been a few years.)

They nailed it. Doug Ulman, Livestrong's CEO, was open, honest, realistic about the six months they've had, and optimistic about the future. Everyone I met looked humble and a bit tired, but I didn't sense one bit of defensiveness or defeatism. And the crowd was fired up.

​Sadly, we've seen lots of examples of nonprofit brand problems recently. Livestrong's response to theirs is a case study for how to respond gracefully and confidently. Well done.

A monumental leadership lesson.

When George Washington ​disappointed his many supporters by resigning as our first President rather than retaining the office for his lifetime, he not only put America on a course for sustainable democracy -- he provided an exemplar of servant leadership that up until that point in history could not have been imagined. Upon hearing the news that Washington had voluntarily stepped down, King George III of England -- yes, the very same England which Washington had defeated in America's Revolution -- said that the act "placed [Washington] in a light the most distinguished of any man living" and called him "the greatest character of the age." Driven by a vision of a new republic, Washington realized that the greatest act of leadership would be to relinquish it. 

I am struck by that same thought as I read the text of Pope Benedict XVI's speech earlier this morning in Rome. ​At a time when it is all too easy to count our worries, it is hard for me to imagine the responsibility and challenge that must come with trying to lead a 2,000-year-old organization with 1.2 billion members. I would submit to you that whether you are Catholic or not, or even vaguely religious or not, there is something in Benedict's act worth reflecting on. It is, at its core, a supreme act of humility, courage, and leadership.

And if you are Catholic, or used to be, or somewhat consider yourself to be, you might find that three minutes reading his speech and another three minutes reflecting on it offer some unexpected inspiration. 

​For more on Washington, see Founding Father by Brookhiser or The Founding Father by Johnson. For coverage of the papacy, I highly recommend the blog Whispers in the Loggia by Rocco Palmo.

Back and better than ever...

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Well, without meaning to I've let over three weeks slip by without a single post. I figured it was high time I posted an update lest you all think I was trapped under something heavy (When Harry Met Sally reference, yes you're welcome).

2013 is off to a great start for me, and I hope for you. Lots of more detailed posts to come but here are a few tidbits of what has me thinking and wondering:

  • First meeting of the Invisible Children board last week. What this group has done and continues to do is nothing short of amazing to me; more to come in the next weeks and months. I couldn't be more honored to be a board member.
  • Spending time applying non-linear regression models to fundraising data -- oh dear, this is really more interesting than it sounds. Hopefully I'll have some way to illustrate that in coming weeks! Stay with me people...
  • Speaking of fundraising data, I'm presenting at the annual Run-Walk-Ride Conference again this year. It's become an annual ritual I very much look forward to. If you're going to be down in Atlanta March 13-14, drop me a line so we can connect.
  • Speaking of fundraising data again, Chuck Longfield of Target Analytics/Blackbaud presented some helpfully alarming statistics about donor retention last week at the Nonprofit DMA conference that are worth your review. I say "helpfully alarming" because there have been people in the industry (like myself, ahem) trying to highlight the need for better engagement for years. Seems like no one wants to listen to the idea that engagement is hard work. Twitter is great for communicating but it ain't gonna magically create more donors for ya! Trust me on this. I'm hoping Chuck's presentation will rattle some cages. More here.
  • Switching the subject before I fall off my high horse, we've recently launched the 2013 Muckfest MS, a series of 18 obstacle races. Think Wipeout. With mud. And beer. You need it. Give it a look here.
  • Ulrich Schnauss, who has the best name in music, released his new album A Long Way To Fall today. I love everything he does and would recommend it without question.
  • Speaking of music, am I the only one who thinks the new version of iTunes is atrocious?

See, I'm back. :-) More soon.

Play to the Gods.

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Love this, from the conclusion of Pete Townsend's new book, Who I Am. Thanks to friend Tony Vengrove for pointing it out on his blog, Tony V's Idea Garage.

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CODA
I dedicate this book to the artist in all of us.
This is as much a note to myself as one to you.  Play to the gods!  In showbusiness the ‘gods’ are the seats right at the back of the theatre, the tough ones, where people got in cheaply and can’t see of hear properly, and chat between themselves and eat lots of popcorn.
For the artist ‘the gods’ is the universe, the big, abstract picture, the unknown, the open sky and sea.  Focusing on the infinite universe might seem rather grandiose, or utterly aimless.  In fact it’s as small or as large as we want it to be.  Some of us believe there is nothing out there.  Some of us believe we are surrounded by attentive angels.  Whatever.
Play to the gods, or — if you prefer — to a small basket full of stuffed toys, or sing into the mouth of a hot-water bottle, or turn the knobs on a chest of drawers and pretend to be 20,000 leagues under the sea.
It’s all the same thing.  If in doubt, just play.

~ Pete Townsend

This just in: Fundraising is hard.

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In the category of "Tell Us Something We Don't Know," last week Compass Point published UnderDeveloped: A National Study of Challenges Facing Nonprofit Fundraising, which concludes, among other things, that nonprofits struggle with high turnover, difficulty finding qualified staff, and a lack of a holistic orientation towards fundraising. I had no idea!

I intended to write a summary and commentary on the piece, but the week got away from me – and better still, Katya Andresen of Network for Good has already done both for me here. 

Oh, I don't know – I don't mean to be so snarky about the study. It's a good read, and worth a few minutes of your time. That said, I'm not sure I'd consider it groundbreaking. If you've been in the nonprofit space for more than two weeks you knew all of this already. 

Fundraising is hard work, and despite what some people will say it isn't sales or marketing or communications. It is its own discipline. It requires practice and patience and determination. And more than ever, it requires leadership.

Yes, fundraising is hard work, but it is work worth doing – and work that, more than ever, desperately needs to be done. Call me old fashioned, but if we want better fundraising leadership the place to start is within ourselves. I'm not saying we don't need structural and cultural change; that would help. However, to overcome the obstacles we have to decide we're going to stop complaining about them and start figuring out ways to climb over them.