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Nicola Bach & Chas Offutt: Grow Your Sustainer Program
I met Nicola Bach and Chas Offutt at Blackbaud’s bbcon conference last year. They have strategies to build your recurring donors and convert web donors to sustainers. Nicola is senior fundraising analyst at Blackbaud and Chas is lead consultant for their donor engagement team.
Gene Takagi: Friends With Benefits
Gene Takagi continues our chat (from the 200th show) on partnerships, joint ventures and other friendly arrangements that can be enormously beneficial to your nonprofit until they’re not. What can you get into and how do you protect yourself? Gene is our legal contributor and principal of NEO, the Nonprofit & Exempt Organizations Law Group.
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Dahna hello and welcome to tony martignetti non-profit radio big non-profit ideas for the other ninety five percent i’m your aptly named host. It feels great to be back in the studio. Oh, and i’m glad you’re with me. I develop a bees or if i came to learn that you had missed today’s show, grow your sustainers program i met nichola bach and chazz office at blackbaud bb con conference last year. They have strategies to build your recurring donors and convert web donors to sustainers nikola is senior fund-raising analyst at blackbaud, and chazz is lead consultant for their donor engagement team. Also friends with benefits. Jean takagi continues our chat from the two hundredth show, which was terrific show on partnerships, joint ventures and other friendly arrangements that can be enormously beneficial to your non-profit until they’re not, what can you get into and how do you protect yourself? Jean is our legal contributor and principle of neo the non-profit and exempt organizations law group on tony’s take two non-profit radio on exit coach radio we’re sponsored by generosity siri’s they host multi charity five k runs and walks. I’m very pleased to give you this interview from bb con last year on your sustainers program welcome to tony martignetti non-profit radio coverage of bb khan twenty thirteen we’re outside washington dc and national harbor, maryland at the gaylord convention center. My guests are nikola bach on chazz office, they’re both with blackbaud nikola is senior fund-raising analyst and chazz is lead consultant for the donor engagement team. Nicholas says welcome. Thank you be here, it’s a pleasure to have you you’re seminar topic is keys to success for growing a sustainer program jazz why is this sustainers program import? Well, tony, i think the growth in sustainers campaign ignored. I think we’re seeing year every year fund-raising growth large part of online revenue has been attributed to sustainers growth, in fact, two thousand twelve or two thousand eleven sustainers growth contributed twenty seven percent compared to previous year, which is low twenties. Okay, so what what what is the message that you think for non-profits i think largely there’s ah, an investment being made by non-profits to really grow and extend their program, investing into the monthly donors as faras dedicated communication treatment, cultivation tactics actually engage those individuals and the non-profit beyond sort of one time. Donation so there’s a real engagement opportunity for non-profits to have donorsearch vest in the program invest in an organization successive organization, and we’re talking about recruiting these donors either online or more traditional channels, right? Absolutely across the board. Okay, nikola, how would you like to introduce this? Well, i think it’s, the biggest growth area for non-profits presently, in the face of declining overall file counts and declining new donors, kant’s the pace of growth of revenue from sustaining donors has increased something like forty three percent over the last four years, and that growth has been ableto upset and compensate for the lack of growth in new single donors. Eso it’s an incredibly important portion of the active donor file what do we know about the loyalty? How likely or unlikely it is that someone is going to drop out of there there. Ah, sustaining e-giving well, for new donors, what we’ve seen on the median is for single gift owners who were new in eleven, twenty nine percent came back and gave a single gift in two thousand twelve, compared to about forty five percent of new sustainers returning so that thirteen we look at the thirteenth month retention rate do they give beyond that first year and stick into the next year? S o that’s for new donors and it gets even more exponentially better from multiyear donors who have given loyally for two consecutive years three, two, four and five plus additional years of giving are very strong indicators for continued yes, because e-giving exact especially their sustainers okay, yeah, the new donors that’s do we know whether that varies by charitable mission or or fund-raising revenue? Yes, it does very can very about organization and mission, and it also varies very much which has alluded to it. Bye bye. Source. So male versus online versus direct response. Television versus street versus radio in certain ads, all those air opportunities to recruit sustaining givers. And they those channels all generate different kinds of sustainers okay, what are some of the better times and better methods? Yeah, face-to-face can be problematic. You have that opportunity. Please sign up in the street and it’s hard to replicate that experience later on. However, if you’re able to keep them beyond the first four months, they’ll tend to stay with you. Dear tv can be very strong radio unfortunately, you said d r tv sorry, direct response to yeah, yeah drug in jail on tony martin and non-profit radio now in your eyes, a probation coming fairly easily, parole roll comes fairly easily. Go ahead. My apologies direct response, yes also tends to generate pretty sticky donors over the long term. What we’ve seen with radio and this is the global trends radio cast, a wide net and unfortunate doesn’t have the stickiest net as direct response television or even online. Okay, jazz, can you talk to some of the cuts across charitable missions? Absolutely. I think we see growth across all all verticals are all anti verticals, but i think they, as nikola pointed out that the growth is attributed or can be attributed multiple channels was which is a indicator of program maturity. I think, for organizations that are really just starting, i mean, what the highest return the first places look your own website, how are you converting people online? What’s the benefit set that’s being associated with? He asked, and how are you maximizing that channel, which is more or less free or cheaper? A lot cheaper. So the converting website donors to monthly being sort of a hyre retention rate now, as a program matures and grows, i think that’s where the opportunity is nikola mentioned is really identifying what those with the acquisition sources in the r o i within this acquisition be so important to the paid and organic approach, too sustainers acquisition, you mentioned the benefits set, how do we know what types of benefits we ought to be offering? Well, i think the first of all, i’m independent organisation, i guess that’s the easy way, easy way out, but, you know, what’s unique to that particular program, you know, i think that we see it is a lot of opportunities where a lot of organization see it is an opportunity from a designated giving standpoint. So for example, i think of pita pita, very it’s, very strong advocacy program. So they have a dozen e-giving program around investigations and rescue and it’s purely driven toward their advocates, too, with a stronger messaging, which is mohr action oriented. Oh, and two associate wth e-giving value to the particular action or impact within the program itself. So it’s a real diversification able to diversify spread e-giving opportunity for an organisation within core audience subsets okay? And nikola, we’re talking about sustainers e-giving at all different kinds of levels to so what jazz is referring to the benefits that i mean that’s obviously got a vary by the by the level at which the person is is giving. Yeah, i think that also varies by organization some organizations to run into other giving clubs at certain levels. So whether you’re giving cumulatively, for example, five hundred dollars, whether that’s in monthly instalments or one ofthe gift that may make you eligible for a leadership circle type thing, it’s organizations have to evaluate what is the best placement of a given donor donors interest, you know, many donors like the kind of engagement that month e-giving affords them. Some organizations are very good about reporting back about what what’s happening in the field, for example, lots of relief organizations that are working in syria right now, i’ll have the opportunity to report back on their work in a really, really life, real time kind of way and as a sustainers you can really see and feel the impact your monthly gift actually has there’s a lot of back end infrastructure, chazz, that has to be built in to have sustainers program, whether it’s, whether the channel you acquired them through his traditional or online, you need to have back office processes for thinking and handling. I just changes credit card changes, credit card explorations, talk about the how you set those up. What was your advice about that? The back office? Sure, i think that’s a great question, because infrastructure being a big part of sustainers, of course, and how are you enabling a program and setting up for success? You know, many organizations lease here today and, of course, have a database of record andan online and online offering, and so setting up those programs in which that they are promoting a sustainers metoo together, meaning a program that is integrated across all channels being sort of the key, of course, but ensuring that the management of the sustainers audience ahead of time is very is planned out. I think that’s a big thing is planning out in advance. You know how we’ll be treated? How will it be communicated? Tio, how are they in most cases, be separated from the main stream within the organization? I’m like nikola mentioned, i think. Major donors being a big a big indicator because major dahna programs are separate a large part sustainers were seeing a greater emphasis around separating sustainers from your everyday donors because there’s a higher level engagement, they’re advocates their volunteers there, major donors potentially and so planning in advance, having that strategy in place, having that road map, you know, to create sustainers program that is acknowledging sustainers grown sustainers and then allowing that maturity teo to to develop around payed acquisition, organic acquisition, whatever the growth in tactics may be at the same time there is integration the way nikola was describing bringing sustaining donors into the e-giving circles. So so there’s there’s some segregation, treating them especially the way you’re describing, you know, benign segregation, you know, nothing, nothing, nothing hurtful, but seeing them special, but then also bring them into the organization in terms of his nickel was saying that the recognition. Okay, so, you know, i think it just add to that everything sustainers ahs. Ah whole. I mean it’s it’s. The great payment plan means a layaway plan. So, it’s, you know, if you have a donor that gives twice a year. Twenty five dollars. You know, what we see is generally ten dollars, per month is a very logical next step. Ten dollars, per month in which is one hundred twenty dollars, per year. Of course, that is a greater value to the organization. So what can you identify? So your various levels and grow grow, the donor based e-giving ending. Doing good ending. You’re listening to the talking alternate network duitz waiting to get into thinking. Cubine this’s, the cook, said, wear hosting part of my french new york city, or guests come from all over the world, from mali to new caledonia, from paris to keep back. French is coming language. Yes, they all come from different cultures, background or countries, and it common desires to make new york they’re home. Listen to them, shed their story. Join us. Pardon my french new york city every monday from one to two p, m. Are you stuck in your business or career trying to take your business to the next level, and it keeps hitting a wall? This is sam liebowitz, the conscious consultant. I will help you get to the root cause of your abundance issues and help move you forward in your life. Call me now and let’s. Create the future you dream of. Two, one, two, seven, two, one, eight, one, eight, three, that’s to one to seven to one, eight one eight three. The conscious consultant helping conscious people. Be better business people. Dahna you’re listening to the talking alternative network. Okay, let’s, start to jazz let’s stay with you and stuff to get into some details about what what are our first steps to building sustainers program? We don’t we don’t, we don’t currently have, you know, i think the first step is courses defining what this is data program is the mission objective of sustainers program how will complement and support your organization? So defining the benefits set could very well include not only the tangible but intangibles where benefits associate with sustainers program for donorsearch could be, you know, financial stability that i’m providing my monthly donation to allow for the organisation respond to catastrophes around the world. Or nikola mentioned the syria example that’s very topical in the sense that my dollars air helping support that organization then and they’re so defining it being very important. And then also, i think branding isn’t a essential component that as well so is their name for your program, you know, champions, you know, legacy similar attack, this we see from a major donor development, but really creating the uniqueness within the program being a kind of core place to start. How do we identify let’s? Go to your nicholas. The right prospects for our sustainers giving program we’ll hopefully you’re acquiring them directly already that’s the fastest pace of growth in terms of growing the volume of sustainers you have so your first initial contact with the prospect, in my opinion, should be a sustaining asked this come complementary with that converting existing donorsearch yeah, fifty dollars a year under twenty how do you know identify who? The blood? Yeah, great loyalty in your file heidtke if frequencies coupled with that and also this is always kind of a scary one, but the people who respond to your first renewal a great prospects for sustainers giving oh, interesting. We know that we know that through analytics, i’m sure exactly what you think is going on. What’s the brother. They’re excited to be a part of the organization in a monetary aspect and want to continue that kind of committed giving. You do have to re budget the rest of your renewals accordingly that you’ve you know, siphon them off and else where’s the budget cut budget with caution, but they are raising their hand proactively early. They’re being asked on that the early nous, the recency of that makes a difference and just a chazz this point, i think the other thing we emphasize is education. You can’t just dive headlong into sustainers program and expect it to be a sensation overnight, so it really takes educating everyone from the interns, helping you answer the phones. Why is month e-giving an important part of your e-giving conversation to the director of the board? Everyone needs to be on the same page with regard to what does it mean? This kind of ongoing, sustained, committed e-giving we’re asking of our donors. And what does it mean for organization wise it important? Especially when it’s brand new exactly. I’ve never heard of this sustainers program this this legacy e-giving what is it and okay? And what’s my r a y? Is it going to be this campaign? Well, it’s not really a campaign view. It’s not talking about the spring appeal december a year and appeal it’s smaller monthly gifts typically in ten, fifteen, twenty dollars and if you’re just looking at it every quarter, every two quarters, that doesn’t look like a very sensible investment. So you look at the annual giving and beyond, okay, and then just as i turned, i think, a ce faras looking at the file of being a true indicator of performance and sort of prospects for sustaining program, but also looking at sort of already existing engagement and thinking about who was already involved in the organization. Volunteers advocates, as i mentioned, you know, those are individuals, major donors, there’s air, all individuals that are already invested in organization, and so the benefits set helps compliment and upgrade those potential individuals too deep in the royalty or deep in the engagement organization. How long should it be before we ask someone toe upgrade their sustainers e-giving we just had a session with international justice mission michelle at i j m had their sustainers upgrade programs eighteen months, so after twelve months on file, they’ll then go through a very well coordinated a great campaign toe upgrade those twelve months sustainers and then try again were work again eighteen months for those that upgraded okay on do we know analytically whether that’s, whether that’s, that’s the right time frame well, we have data that compare it’s been a very successful model for them. They are more than four percent of their sustainers an upgrade with a average gift amount about thirty two dollars on top of the sustainers monthly gift. Okay, so a four percent upgrade annually is considered successful. Consider it. We’re going i don’t have a very successful but the most important thing there too is also their active communication with the sustainers i think that open dialogue, that treatment as well as we mentioned and talked about the very port part of the process. So it’s not just a one upgrade campaign in september. It’s it’s, the program that’s in place throughout the year to cultivate those donors to identify you know who are how are they engaged? How do they want to be communicated, tio? And then using a a coordinated effort throughout our recording effort at a cz certain pierre to time certain peer-to-peer day year to really upgrade and make a substantial impact in the sustainers program? Do we know chazz how what the impact is on outcomes sustainability of the program when people are thanked at different intervals? No, should they get a monthly thank you every time? There’s a monthly gift? Should i get a semi annual annual way? Have any data that compares different the frequencies? Of thanks. Well, i think that the state of best practices always ended your receipt. And in a common tact, i think many organizations will use it at your end since we’re talking about your it’s it’s urine time a year at least, is that thirteen gift and so thinking about that from sustainers sustainers segment at your inn to invite. Not only think them with a donor receipt, but i have a special appeal to the sustainers make a thirteenth gift in december. Okay, so that’s about that’s the best practices is the year end. Well, there’s a urine, but you’re in receipt. Yes, to your question. Okay, okay. So unwise to be sending a thank you. I mean, i’ve heard this question among non-profits that either i don’t know if they’re doing sustainers programs are contemplating, but how often should we think it is a gift once a month. So i sent a letter every month and there’s the fear that if you do that, you remind them that they’re giving every month and you worried that they’re going to cancel. And this question came up in our session as well, and i think to chazz is point. Most organizations are doing the text receipt thank you, and then keeping their sustaining donors abreast of activities with the organization and giving them other opportunities throughout the year to make additional donations beyond the year end appeals. And to that, i think you mean the mentality or that the thinking has been, you know, setting forget i think we’re moving away from that a little bit instead of not to be afraid of communicating to sustainers not to be afraid that if you remind them they’re giving you, they’re going to cancel its really the other way is what are you doing to engage them in the mission in the program throughout the year, remind them of their impact and actually engage them and to become mohr involved in the work that you do? So they’re our responders, i think, to the receipt in the aspect of it, their monthly all responding sleeps with an online transaction, but the end of year receipt we see generally beings were the core focus from the benefits set that is a benefit for a donor wrap up all the year, giving in one email, one letter, whatever it may be for tax. Purposes, okay? And that also has implications for upgrades. If you’re not keeping someone engaged, then the twelve month ask for the upgrade is going to be out of the blue right? Absolutely seems nonsensical, and i actually think that sustained giving the e-giving behavior of giving every month is the perfect engagement tool for millennials that is, millennials, i think, are already engaging in a charitable way, whether it’s through kickstarter, volunteering and they want to have that community immediacy feel toe what their actions are, and i think sustaining giving with the appropriate feedback loop to the sustainer is a perfect way to get those younger donors the millennials a thirty year olds the ones were all vying for. They’re going to replace that very generous world war two generation that we’re so desperate, tio supplement i think that lots of organizations could benefit from having that sustainers conversation with millennials generation, we still have some time left. What else? Nickel if you want to say about those sustainers program, i think if you’re going to do it, go all in, commit to it one hundred percent and look at it in the long term it’s not going. To stay overnight to see yeah it’s, not an overnight sensation. It’s a sustainable way of giving it’s a sustained way of giving and your entire organisation from the reception is to a man who makes the decisions or the woman needs to be bought in that this is the way to give. And i think that’s the most important thing when you approach a sustainers program because it can seem like small numbers and you’re not really making a dent where you got that big appeal with single one off gifts feels fabulous, but it’s not that’s, not a sustainable way of raising money. In my opinion. Okay, jazz, what else? What else did not that we still have some time? What else didn’t i asked? One of the biggest things we’re seeing emerging trend right now is organizations going to default sustainers ask mean instead of a one time sustainers asked meaning tony, great to meet you. Consider making one time donation. It’s tony, we consider being a monthly donor to this programme and so default ass is put in the front for first foot forward is sustainers now that is emergency numbers and organizations really investing in. That practice, but we looked at us compared to australia, uk, canada where sustaining giving is, you know, thirty, thirty five percent of philanthropy that’s the first ask that those countries in the countries outside the u s i already have a very interesting so we’ve got a long way to go. We’re seeing significant growth, but it’s going it requires investment organizations, requires commitment and planning in advance, but there’s, good signs, good trends and good growth to date. All right, now the the commitment for this has got to start at the top clearly, i mean, i don’t think this could start with the chief development officer think there needs to be sort of a cultural mindset that sustainable sustainers e-giving is sustainable and important for our future and that’s gotta come from those ceo it’s gonna be adopted. I mean, across the organization there’s, no doubt about that, i think, adopted and then put forth as faras priority and how on organizations going to do that and define it to find the benefits to find the program and support of the mission zoho okay, everyone replies, chances point the rest of the world really is this is the way of giving this is very interesting. So yeah, it’s the europeans, they’re doing this a cz their their initial ask their default over a long time, and the banking structure has a large parts or play in that because all those of us where europeans that’s, how you pay everything is bialik trump, elektronik funds transfer you to be a little gyro, but most bills, most anything you interact with used have to go to the post office to make those payments and everything’s on lines it’s a real mindset that’s just how you give it’s a cultural mindset in many european and latin american countries as well, and i think that, you know, culture and banking infrastructure have a big role to play, and we’re moving that way, but fund-raising practices also have a big role to play, so we’ve been taught that the one ofthe gift is king and that’s the way to to solicit donors, and i think we as fundraisers need to make that mental shift as well. Really it’s sustained giving because the benefits to the organization that you’re trying to help our so much greater yeah, it’s a it’s a hundred degrees from where we are absolute and there’s evidence that the sustainer donors will become, or can can, can become the major one off one ofthe donorsearch absolute when there may be a cause for a campaign where the the monthly is not goingto be sufficient well, and that and that’s a great point, because i think the overall and some of the data nodes and nikolai presented sustainers value is far greater than organizations extends beyond the monthly contribution. I mean, as we mentioned, that the volunteerism but just think that an advocacy, but just the financial impact on this one off campaigns throughout the year, it becomes sort of a trademark of sort of ah donorsearch port, but then those opportunities of further support i’m should not be neglected because that value increases tremendously for unfortunately catastrophes that happened or certain special projects throughout the year. Our year end there’s air all opportunities to talk to your sustainers as sustainers with that impact potential, you know, it’s very interesting. I do plan e-giving consulting and i have for about sixteen years, and there are parallels between what we say about people who include the organization in their will or have a charitable gift annuity where they’re getting regular income typically is quarterly from the organization, and those can lead to larger hyre individual gif ts increased annual giving so there’s a parallel because of this ongoing, sustaining relationships mean somebody in somebody who has the organization in their will they’re they’re committed for life. If you want to continue that arrangement and the engagement levels like volunteerism, like you’re saying, jack, do increase pretty frequently write interesting, interesting parallel between two very different types of giving state vs absolute sustainers through different participation, very different, but the outcomes on the relationships are really interesting parallels. Exactly. Thanks so much. Thanks for sharing. You’re interesting for me. Thank you very much. Nikola bok is senior fund-raising analyst for blackbaud chazz office is lead consultant for the donor engagement team at blackbaud i thank you both very much. Thank you durney been a real pleasure. Tony martignetti non-profit radio coverage of bb khan twenty thirteen and i thank you very much for listening. Time for live listener love. Hello, new bern, north carolina. Beverly mass. Absecon, new jersey. I know i said that, right? A lot of people think it’s abscond. But i know it’s, absecon, new jersey on the jersey shore love it! Atlanta, georgia and cummings, georgia live listener love out to everyone there and brooklyn, new york. Thank you, brooklyn. Nice to have you nice and close. I appreciate that we could go abroad a little bit federal argentina, federal, argentina welcome tokyo and sendai, japan. Konnichiwa, jeddah, saudi arabia love to have you hope you come back. General, we haven’t seen you before. I don’t think ukraine, you’re in our thoughts ukraine, you’ve been with us before. Glad you’re with us again live listener love out there and also seoul, south korea, on your haserot always appreciate the koreans checking in thank you very much. Generosity siri’s, they host multi charity peer-to-peer five k runs and walks multi charity means that you can have an event with a small number of runners and walkers because together with the other charities that are in the same event, there’s hundreds of runners and walkers. If you happen to be using this summer time to plan your fall fund-raising or beyond, then ah, why don’t you speak to generosity? Siri’s they’ve got runs walks coming up in new jersey, miami atlanta, new york city, philadelphia and toronto. It might make sense for you. Talk to dave lynn he’s the ceo. Please tell him that you’re from non-profit radio and you can reach dave lynn at seven one eight five o six. Nine triple seven or on the web generosity siri’s dot com very grateful for their sponsorship. Please check them out. The table’s got turned a couple weeks ago and i was interviewed on another show was bill blacks exit coach, radio it was fun to sit back and just answer questions and just yammer along and i don’t have to worry about watching the clock or anything like that was quite a pleasure. I see how easy the guests have it. Andi no, jean takagi is listening. So i thank you very much. Bill black for having me on your show. I talked about the takeaways that i’ve learned from over two hundred non-profit radio shows and the audio and video that i have are on my site at tony martignetti dot com, you’ll find a listening length to the exit coach radio interview i did with him, and that is tony’s take two for friday eighth of august. Thirty first show of the year. Jim takagi hello. Hi, tony. How are you? I’m doing very well. Gina’s are managing attorney at neo non-profit and exempt organizations law group in san francisco. He edits the popular non-profit law blawg dot com and on twitter he’s at ji tech. Jean, i’m doing very well glad to have you back. It’s a pleasure to be back, tony. Thank you. We’re going to continue our conversation from a couple weeks ago, the two hundredth show when we were talking about partnerships, i call them friendships, you know, friend, i said friends with benefits, but partnerships and things like that, and, uh and how we’re going to protect ourselves. You and i talked a little about who we might partner with. Maybe we can say a little more about that. Sure, you know, i think we teased out a little bit the idea of non-profits collaborating with one another and how we’re pushed by different agencies and thunders and maybe the public in our stakeholders teo, engage in more collaborations, teo further our missions and how we choose those partners i think is very important and making sure that we understand who we’re working with what their skills on dh strengths are and what their weaknesses are and how we might engage together. Synergistically, i think all of those things you want to bet a little before you develop some sort of legal relationship with them. Yeah, and i would think the board has a role in this because if there is going to be illegal agreement between them and we’ll talk about whether that’s appropriate or not. But if if if we’re going to go to that level than the board needs to be involved in this process, too, i think when, when, particularly when the relationship is going to be a substantial one that’s true. Now, if it’s going to just be a one off, you know, one event, you provide the drinks and we’ll provide the food. Okay, then? Yeah, we don’t worry about the board there, but for if we’re goingto have this joint fundraiser that’s going to take three months to prepare ah, and had been involved in a big place that we have to rent out and insurance and making sure that we get adequate participation and funding and we rely on other people to show up. Those are the types of things where the board may want to get involved, especially in the first time relationship, and after we’ve found a partner or partners that that maybe working with us, we want to know whether we should, how we should document our relationship. And and we talked a little about the mou, the memo of understanding versus the contract, right? And, you know, i’m not the biggest fan of the m o you, joe, you know, i think i miss you. Okay? Okay, well, how is that? Well, i think and, you know, speaking as a lawyer and you roll their eyes a little bit that’s okay? The mou really is intended to be an unenforceable documents so it’s like yes, you do this and we’ll do that. If it’s a joint fund raiser, you go ahead and rent the revenue will go ahead and get the entertainment on dh will provide the educational materials now in an mou that’s not maybe always specified, but we don’t say well, what happens if you don’t, you know, rent the venue if you didn’t get adequate insurance for it or if we didn’t market right? And where we didn’t get the educational materials out, so we can’t really deliver our message the way we wanted to. And now it may be one party spot more than the others and what happens in that case if it’s an mou that’s not intended to be enforceable? Well, then, i guess it’s just a broken trust and you know, everybody’s on their own after that. But if you intend fur, some of it to be enforceable, you know, sometimes you want to get that language in there and make sure that it’s understood that it’s an agreement. A lot of times i see people who hedge on this and they and they have this enforceable agreement, but they call it an mou, and even government agencies do that that’s a little pet peeve of mine it just to make sure that both parties are on the same page. Is it enforceable? What happens if the other party doesn’t live up to their agreements? And are we clear about what you’re supposed to do? This is what we’re supposed to do now. We should have an attorney draft this it’s going to be an enforceable contract, which is what your preferences i mean, that needs to be drafted by an attorney? Well, i think the at least the initial draft, if you enter into the same type of relationships multiple occasions, you may not need the attorney to bet every single time, particularly if it’s smaller deal, but yes, generally speaking, i think you’re right, you do want an attorney to at least review ah, the written agreement, whatever you call it, whether you call it an mou or not, you want an attorney toe review that and maybe question you on challenge you on some of those points to make sure that everybody is clear about what their respective obligations and responsibilities are and what they can expect reasonably from the other party, because there are elements of a contract that are based in state law that make a writing into a contract and make it enforceable or not. And so if those elements aren’t there, you might think you have a contract, but it wasn’t prepared, or at least reviewed by an attorney probably should be prepared, i think. And you may think you have a contract, but you don’t. Yeah, or or you may be just missing a whole. Bunch of things like, when does the contract? And there are a lot of times that they’re just open ended contracts and you don’t want the other party coming up to you, like two years after you last talked with each other and saying, hey, you didn’t live up to this end of your bargain last week, right? All right, okay. All right. So, it’s, a lot of implications around the contract mean, its’s it’s an art drafting these and making sure that they are, in fact, enforceable under the state law where they’re going to be where they’re going to be judged. Yeah, and i think it also is an opportunity for you for you to just get mutually gets a mutual understanding of what your respective roles are, because sometimes there’s a lot of gray areas that, you know, we didn’t discuss verbally, you know, who was supposed to be responsible for this thing, but it’s critical to what we’re doing together, and we kind of both just let it slip by having a written agreement and really challenging yourself to make sure that it’s gonna work in multiple situations and with different contingencies think that’s really important. Okay, i think i’m glad you said it. I can tell you feel strongly about it. Excellent. I should plug there’s another non-profit attorney out there. Her name is alice carter she’s a friend. And she writes the charity lawyer block. I got an excellent article on mou or written agreement. And if anybody wants to look into that further, i highly recommend that article. I know ellis she’s in phoenix, arizona, isn’t she? Yeah. Yeah. Ok. That’s, charity law blawg dot com verity, lawyer block charlie lawyer blogged, right? That’s because she calls herself charity lawyer. Yes. Okay. Ellis if she’s listening. Hello, alice. Um, now, all right, so what happens if there is a disappointment and somebody doesn’t follow through and, of course, that somebody could be you now that we have an enforceable contract, you know, it’s enforceable always and including against you. So suppose somebody doesn’t follow through and do what they’re supposed to do, and we touched on that on the last show as well. And, generally speaking, we probably don’t put a lot of specific remedies in there. We just say, well, if one party doesn’t live through and the other party got harmed by it you know, the party that didn’t follow through should compensate and make up for any harm that their partner i’ll say partner, loosely speaking, lost out on just to make them back make him whole again. But there’s sometimes maybe specific things that that that you want from them. So if they were expecting you were expecting them to deliver something and they didn’t do it on time. You may say, well, we still want delivery of of that. Plus, we want some sort of compensation or or additional services because you missed out so you can be very specific in the agreement, or you could just let the agreement be enforceable by the amount of damages or harm that you suffered, and this will be part of the negotiations of the agreement. That’s, right? You might think your damages should be something, and the other side may think now, you know, shouldn’t be that large, and that will be all part of the discussions in the negotiations. Yeah, and the more you know, involved in the bigger the the agreement and the, you know, potential joint venture that you’re engaging in that the more lawyerly it should look, with more provisions. If it’s really again, a very simple thing. You may not have to worry so much about technical provisions, unless you really think you’re gonna be harmed in a specific way, right? If it’s something smaller and like you said, ah, one off that’s ah, small, a small venture together. Yeah, and you’ve got to be reasonable. Obviously, you don’t want to spend five thousand dollars in legal fees for an event that’s going to only generate ten thousand dollars. Now we can we have this thing called partnerships, which is a legal term. When would a partnership between non-profits be appropriate? Well, a partnership, legally speaking means that both entities, they’re both partners, are going to be completely libel, responsible for whatever they’re doing together and that’s a really important point to know, because that means if you’re one partner and you’re the other partners screws up and some people get hurt, they consume both of you. And if your partner says, well, i’m sorry i don’t have any money to pay off the lawsuit, you’re completely responsible for the whole thing, not just half of it, you’re responsible for the whole thing. So really important part to understand if you’re really in a partnership as we use that term legally, that means you’re going to be completely responsible for anything that goes wrong with the partnership. You’re you’re working hard to stay in the jargon jail because you don’t want to say you don’t want to say joint and several liability, right? You said it, not me, ok, i was in my mind, right? So that means that everybody’s responsible for everything, irrespective of what their role in the problem might have been do i say that? Right? So you could be completely innocent and completely not responsible for the harm caused to a third party. But at least when they’re trying to collect some money for for whatever harm they suffered, they can get it all from you if your partner doesn’t have any money. Right. Okay, now, partnership could be more than just two non-profits. Yeah, absolutely. Okay. Okay, just making that shirt okay. Making clear. Okay, so, that’s a pretty serious thing to take on partnership versace not declaring it as a partnership. And how would you make that clear? That would be in the agreement or partnerships require certain special agreements. It’s a really great question because you could enter into a partnership without a written agreement. If you just act in a way that says, hey, you’re jointly responsible for putting on an event or putting on a program or delivering services together, and you show that you’re you know, just by your actions that you’re jointly responsible for it. And perhaps you’re sharing the revenue stream that’s being generated if there is some revenue coming out of that joint venture well, you could form a partnership for which you’re liable for your other partners, mistakes without a partnership agreement or without any writing at all so it could be imputed by philip business based on all the facts like you just described them, yeah, hey can can be, uh sometimes people enter into agreements and they say in the agreement, this is very common to say we’re not engaged in a partnership and they feel like, well, that’s an out and that’s helpful language, but that’s not the whole story, because if you’re still sharing responsibilities and obligations and your conduct is that of a partner and you’re still sharing the revenues let’s, say with two partners fifty fifty yeah, no matter what you’re contributing, you still may be on the hook of a partner to a partnership, even though the agreement that you entered into said we’re not partners see, this makes me want to just live in a cocoon and never talked to anybody because i may i may have a conversation with somebody on the subway, and now now i’m in a partnership, it just means you want to talk, talk about it a little bit with a lawyer. Just to get an understanding of how to form these collaborations and one talk with the lawyer may go a long way in multiple relationships. So get that initial conversation, or maybe attend illegal seminar, where they talk about these things. Okay, very good advice, let’s, let’s, take our our break. When we come back, jean and i’ll keep talking about friends with benefits, and we’ll talk about maybe some. Well, not maybe talk about some measures of success, and howto decide about sharing the results of your collaboration together. Notice. I didn’t call it a partnership, because it may not necessarily be one. Stay with us. You’re listening to the talking alternative network. Have you ever considered consulting a road map when you feel you need help getting to your destination when the normal path seems blocked? A little help can come in handy when choosing an alternate route. Your natal chart is a map of your potentials. It addresses relationships, finance, business, health and, above all, creativity. Current planetary cycles can either support or challenge your objectives. I’m montgomery taylor. If you would like to explore the help of a private astrological reading, please contact me at monte at monty taylor dot. Com let’s monte m o nt y at monty taylor dot com. Are you suffering from aches and pains? Has traditional medicine let you down? Are you tired of taking toxic medications, then come to the double diamond wellness center and learn how our natural methods can help you, too? He’ll call us now at to one to seven to one eight, one eight, three that’s two one two, seven to one eight, one eight, three or find us on the web at www dot double diamond wellness dot com way. Look forward to serving you. Talking alternative radio twenty four hours a day. If you have big dreams in a small budget tune into tony martignetti non-profit radio, i d’oh. I’m adam braun, founder of pencils of promise. Oppcoll welcome back to big non-profit ideas for the other ninety five percent. We’re joined by some new listeners. Ah, third, listen, another listener in georgia. Decatur. We’ve got decatur, atlanta and coming. Uh, cummings, georgia, do you know each other? I wonder san francisco, california gene, i don’t think that’s you there’s somebody else listening in san francisco, brooklyn, new york, still with us love it and none. Jing china china joined us. Ni hao jean let’s see about what would cover in continuing this let’s see about defining success, how we should should should measures of success be part of our agreement? Yeah, i think it depends upon the level of collaboration that we’re talking about. They’re different levels that we can go to. For example, two non-profits could decide they want to share a photocopier. Okay. That’s a collaborative effort on the very, very low end of the scale. Or maybe they want to share a chief financial officer that gets a little bit more complex. That’s. Interesting. Right? Sharing staff. Yeah, yeah, right. Or maybe they just want to share space so that, you know, depending upon the level we get to it. Maybe you know, pursuant to a resource sharing agreement or cost sharing structure. Or we may have to do, you know, create mutual service agreements or independent contractor agreements, maybe it’s one way, maybe it’s two way going both ways and how we figure all that out. Uh, it means that we we have to understand what the goals are. So going back to your question at the outset of any negotiations or discussions between the different non-profits that want to collaborate, they have to figure out their mutual goals, and then individually they have to set apart well, what do they each want? You know, from from this relationship, and how will they define it to be a success? Because that varies just completely amongst every collaboration you mentioned, the sharing of space, and that doesn’t have to certainly be between non-profits a lot of times someone who’s close to an organisation on a lot of times, that’s a boardmember not necessarily ah, has extra space, and they will give the space to the to the non-profit um and i don’t know that those air always papered or even paper correctly, but i bet they’re not even a lot of times just paper. But there should be some kind of an agreement in writing between that the company that the boardmember let’s say represents and the non-profit right, especially if that boardmember is going to be paid there’s some conflict of interest issues involved their private foundations can’t do that at all for money. Public charities can as long as it’s reasonable compensation. But there are some rules, both ous five a onesie, three entities and there’s some state non-profit rules that may apply so good conflict of interest policy is going to be important to make sure that it protects the non-profit from getting into on ly a reasonable deal to the non-profit not one that provides some sort of private benefit to the director. But, you know, the vast majority of these cases are where boardmember czar offering space for free right to the non-profit andi it’s their own place that that’s absolutely fine. If the boardmember is actually leasing that out and sublease may be necessary or else they may be breaching their own lease with the landlord. Okay, a lot of implications to that mean, just, you know, we have to we have to be protecting ourselves. I mean he’s non-profits on non-profit is a company that’s it’s a corporation it’s a business. It just happens to be a non-profit business, so it needs to be run like a business. Absolutely. We gotta protect ourselves. Our employees are the people we’re serving and those lives were saving the donors who have invested, you know, we all ah, they all we all need to be protected. And so that’s that’s, you know, that’s why we’re talking about this stuff? I mean, you know, just do these things lightly and, you know, sort of on a handshake. Yeah, and, you know, but you know, non-profits don’t have owners that’s a big difference and that’s why the board it’s got to be reminded there’s, not an owner overseeing to make sure that the non-profit really gets a fair deal, and maybe you were lucky enough to have an executive who’s willing to take on that task, but it’s really up to the board to make sure that they’re looking after that. Non-profit and making sure that the non-profit is not giving sweetheart deals to anybody else outside of the organization, regardless of whether they’re a boardmember or an officer or anybody the non-profit has got to protect its own charitable assets. That would be the role of shareholders in a profit making corporation, and they have their own personal motivation to do that. But non-profit boardmember here, mostly volunteers. They may not have that, and they may sort of not be exercising that type of diligence at an owner would over their own assets. But they kind of have to, because they’re they’re the ones that are providing that stewardship over the non-profits asset. So, really, that they need to be paying as much attention to the non-profits work as they do their own businesses work. Ideally, yeah, okay. So i suppose we have some delivery bols involved in all this, and this is, you know, sort of subsumed in what we’ve been talking about already just want to make it explicit. If there’s money that’s going to be shared or some other delivery ble that’s goingto result maybe it’s, even ah, a grant proposal that’s going to be joint and that’s the delivery ble that that should be specified. Yeah, that should all be specified. And, you know, i sort of wanted to jump it back in on that partnership thing. It’s not always bad toe have a partnership. Maybe you do want engage in a partnership with another non-profit and do it through a legal entity like a limited liability company and that’s almost like having a kid together. So if you’ve decided to partner with another non-profit tohave child or this joint venture together, you better know who that person is. And you better know how you want to raise your child and what each of you are going to contribute to the child’s growth and what happens when you have a disagreement over how to raise that child. If i just take that analogy further. And you know how comfortable you’ll be with liabilities caused solely by your co venture? Because if you don’t want to be partners, limited liability company means that you’re only liable to to the extent of your investment in the llc, the partnership liabilities don’t come up if you do this right, they don’t come up and hit the non-profit partners, they’re just limited to whatever that contributed to the llc. Still, i’m glad i called this friends with benefits because basically you’re saying you gotta hold hands before you sleep together. Yeah, kind of and taking it one step further if a joint ventures like having a kid together. Ah, merger on you mentioned that at the last of the last show that’s kind of the ultimate collaboration and that’s, you know, if i could take take bad analogy further let’s, let’s say that that’s really like marriage on marriage with almost no possibility of divorce, are very, very difficult. Um, it might be true in the analogy and analogous version, but no, no it’s much easier in the end, i have personal experience on that take a metaphor further, but yeah, no merger is you’re you’re now want you’ve, you’ve formed a union, you’re you’re now one, right? Okay. And all sorts of considerations to make sure, you know, you understand that not only are you gonna acquire all the assets of your marriage partner, but you’re goingto acquire all of their debts and liabilities and obligations as well. So you really got to know what the other partner is bringing to the table. Hold hands before you before you sleep together and make sure you use protection. Very good that’s what comes from our friends from friends with benefits segment? And now, i mean, you know, we got to protect ourselves. That’s, that’s what you’re saying, do you have to we have to leave it there. Thank you very, very much. Thanks, tony. You’ll find jeanette non-profit law blogged dot com and on twitter he’s at ji tech next week, a non-profit technology conference panel on female technologists that the panel is not all men that’s good, because men don’t know anything about women’s struggles competing in technology. So it’s, an all female panel talking about females in technology. Also any sample ward returns she’s, our social media contributor and ceo of non-profit technology network, where i did that interview? If you missed any part of today’s show, find it on tony martignetti dot com small and midsize shops. Remember generosity siri’s for multi charity five k runs and walks seven one eight, five o six. Nine, triple seven or generosity siri’s, dot com. Our creative producers, claire meyerhoff, sam liebowitz is on the board. Our line producer shows social media is by julia campbell of jake campbell. Social marketing and the remote producer of tony martignetti non-profit radio is, as always, john federico of the new rules. This music is by scott stein of brooklyn. You with me next week for non-profit radio. I hope you will be big non-profit ideas for the other ninety five percent. Go out and be great. Yeah. They didn’t think that shooting getting dink, dink, dink, dink. You’re listening to the talking alternative network waiting to get in. Nothing. Cubine are you stuck in your business or career trying to take your business to the next level, and it keeps hitting a wall? This is sam liebowitz, the conscious consultant. I will help you get to the root cause of your abundance issues and help move you forward in your life. Call me now and let’s. Create the future you dream of. Two, one, two, seven, two, one, eight, one, eight, three, that’s to one to seven to one, eight one eight three. The conscious consultant helping conscious people. Be better business people. Dahna hi, i’m ostomel role, and i’m sloan. Wainwright were the hosts of the new thursday morning show, the music power hour, eleven a m we’re gonna have fun shine the light on all aspects of music and its limitless healing possibilities. We’re going invite artists to share their songs and play live will be listening and talking about great music from yesterday to today, so you’re invited to share in our musical conversation. Your ears will be delighted with the sound of music and our voices. Join austin and sloan live thursdays at eleven a. M on talking alternative dot com, you’re listening to talking alternative network at www dot talking alternative dot com, now broadcasting twenty four hours a day. Have you ever considered consulting a road map when you feel you need help getting to your destination when the normal path seems blocked? A little help can come in handy when choosing an alternate route. Your natal chart is a map of your potentials. It addresses relationships, finance, business, health and, above all, creativity. Current planetary cycles can either support or challenge your objectives. I’m montgomery taylor. If you would like to explore the help of a private astrological reading, please contact me at monte at monty taylor dot. Com let’s monte m o nt y at monty taylor dot com. Are you suffering from aches and pains? Has traditional medicine let you down? Are you tired of taking toxic medications, then come to the double diamond wellness center and learn how our natural methods can help you to hell? Call us now at to one to seven to one eight, one eight three that’s to one to seven to one eight one eight three or find us on the web at www dot double diamond wellness dot com. We look forward to serving you. Talking.