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Ashley Whillans: Persuading The Wealthy To Donate
Ashley Whillans’ research reveals the language that stimulates giving from your wealthy potential donors. She’s assistant professor at Harvard Business School.
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Gene Takagi, our legal contributor and principal of the Nonprofit & Exempt Organizations law group (NEO), walks us through this important board responsibility: hiring the executive officer. (Originally aired 7/11/14)
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Hello and welcome to tony martignetti non-profit radio big non-profit ideas for the either ninety five percent. I’m your aptly named host. Oh, i’m glad you’re with me. I’d suffer the embarrassment of pem fi gis if you bullied me with the idea that you missed today’s show persuading the wealthy to donate ashley whillans research reveals the language that stimulates giving from your wealthy potential donors and your boards role in executive hiring. Jing takagi are legal contributor and principal of the non-profit and exempt organizations law group walks us through this important board responsibility hyre ing the executive officer that originally aired on july eleven twenty fourteen on tony’s take two the charleston principles we’re sponsored by pursuant full service fund-raising data driven and technology enabled, you’ll raise more money pursuant dot com and by we be spelling super cool spelling bee fundraisers we b e spelling dot com my pleasure. Now to welcome ashley whillans to the show, she just turned her phd from the university of british columbia. She conducts research with non-profits companies and government. She was a twenty fifteen rising star of behavioral science. In twenty sixteen, she helped start the behavioral insights group. In the british columbia provincial government next month, ashley begins her faculty career as an assistant professor at the harvard business school in negotiations organizations and markets she’s at ashley whillans and i’m very glad to welcome her to non-profit radio welcome, ashley. Thank you so much for having me this morning. Pleasure. Now, there’s. A lot going on in your life. You just got your ph d just last month, right? You just graduated? Yeah. That’s. Right. Uh, something like two weeks ago. I just got my my doctorate. Congratulations, that’s. Outstanding. Because because when we started, when we started emailing your your email signature said phd candidate and now it says ashley whillans phd. Yeah. That’s right. That was the most exciting email change i made recently. Yes. Right. You got to go into preferences signatures and change. Delete the word candidate that’s. Outstanding. Yeah, great. Yeah. Now i see you are not using period’s. Most people do. Ph, period d period. You’re opting against the periods. Is there some kind of ah, that a brevity fetish you have or something? What? Why’s that no periods. Yes. Efficiency, laziness, something like that. Okay, even those two keystrokes, those two period keystrokes. It’s. Too much with the right hand. Too much. Okay. Okay, on dh now, big, big changes coming up you. So you’re you’re in british columbia that you went to university of british columbia. But now you gotta move to cambridge, right? You’re moving tomorrow? Yeah. Moving tomorrow. Uh, morning. Cambridge, massachusetts that’s. Incredible. Um, good luck in the move. Are you are you a canadian originally? Your canadian citizen? I am a canadian. Okay. All right. Now, aren’t you at all concerned about our muslim ban? I know ashley willens. So that’s a suspicious sounding name to me. Is that a muslim? Ashley whillans is that a muslim name? Sounds sounds muslim. No, i i don’t have to worry about it, but i know it is an issue for some of my my friends. So this’s america shortly? Okay, you’re you’re friends, right? It’s affects a lot of people’s friends and that you know where the where the democracy, where everyone is under suspicion. So i did see your head shot and i did not see ah, hey, job on your head shot. So may i hope you’ll get through scrutiny. I don’t know what we’re looking at canadian citizens, how scrupulous were being. I hope you have no trouble coming in. Let’s, get to the substance of sort of self concept and and giving, let me ask, let me start. A lot of people think the wealthy are selfish. Is that so? So i would definitely hesitate against that general idea related to the research that i did. I think it’s, so i think that that wealthy individuals have a lot of personal control and so it’s not that wealthier individuals, on average or selfish, but rather that they and are used to and enjoy having autonomy or personal control over decisions in their daily life. Yeah, that autonomy then and an agency we’re going, we’re going to get to. There was a really interesting study in twenty fifteen of preschoolers, which is related to the work that you did and we’re going to talk about, can you? Can you summarize that for us? That twenty fifteen preschoolers research? Um so i think broadly, this wasn’t my research was that the preschool fighting is that kids from wealthier families actually give less tokens during an economic game in the lab than been children from less wealthy background, so they decide to keep more tokens for themselves, even when the tokens they’re going to go to other children who who couldn’t be there to participate in the study because they were at sick in half because they’re sick in the hospital, right? This study is just one example of many that are sort of proliferating in the social sciences, suggesting that, um, people from wealthier backgrounds tends to give less when one provided with the opportunity, right? And your research finds the way teo overcome what? What? Maybe? Well, it’s, your research points out that it’s really not something innate, but it’s the messaging coming from the charities that is a variable factor that can influence the giving of the wealthy and the less affluent, too. Yes, that’s right. So, really, what our research fight is that the and this is this isn’t necessarily surprising so fund-raising professional, they’re like, of course, you should table your message to your audience, but i think what’s, really. So what we find is that he’s more agenda messages, messages that focus on personal achievement and control are more effective it encouraging giving among those with the greatest capacity or messages that focus on what we can all do together to help the cause are more effective for those with the less capacity give but across our studies of more than thousand working adults from both chicago in vancouver, we don’t find any inherent differences in our studies between those with most the most money in our samples in those with please okay, samples so we don’t see a main effect where people who are wealthy orc are giving much less, and people have less money or giving maurine the content of the earth studies. But rather we find that depending on how the message is frame’s related to charitable giving, the wealthy give more or the left latto give more. Okay, now that sound very it sounds like you’ve said that those few paragraphs a bunch of times in the past couple months or so nastad sounded very, very polished and finished. Have you repeated those words a few times? No, not too much, not too much, but i have thought about this research a lot over the last three years. Yeah, okay. All right, well, it’s there’s a lot there. We’re gonna unpack it, but, um, yeah, i like the bottom line is that it’s not only about the wealthy and it the tailoring a lot of times fundraisers or anybody and non-profit they talk about tailoring a message? They mean used the person’s first name or, you know, address them personally or address them by ah, bye program that they’re interested in or certainly maybe e-giving level where, you know, but we’re we’re talking about cutting it. A different way. Which would be bye affluence. Do i have that on my perverting? Your researcher of kapin basically absolutely right. Okay, okay. We’re gonna go out for our first break. Thank you for telling me. I did not pervert your research. I don’t want to do that. We’re gonna go out for a first for our break. And when we come back, you and i will continue talking about persuading the wealthy and others to donate using the right messaging. Stay with us. You’re tuned to non-profit radio. Tony martignetti also hosts a podcast for the chronicle of philanthropy fund-raising fundamentals is a quick ten minute burst of fund-raising insights published once a month. Tony’s guests are expert in crowdfunding, mobile giving event fund-raising direct mail and donor cultivation. Really all the fund-raising issues that make you wonder am i doing this right? Is there a better way there is? Find the fund-raising fundamentals archive it. Tony martignetti dot com that’s marketmesuite n e t t i remember there’s a g before the end, thousands of listeners have subscribed on itunes. You can also learn maura the chronicle website philanthropy dot com fund-raising fundamentals the better way welcome back to big non-profit ideas for the either ninety five percent. Ashley whillans recent phd. We’re talking about her research on messaging and e-giving ah, the different levels of of affluence. Actually, you did this with riel charities. Is that that’s what i gather, right? Yes. That’s, right. So we conducted the research with an organization that focuses on effective plan to be the life you can save on. We’ve also done this with a large private university in the united states. Okay, i guess you’re not at liberty to say the the name of the university is that? Does that part of the agreement? That’s, right? Yeah. Kapin nondisclosure agreement. Okay, now we know that you’re headed to harvard business school, but, you know, that’s just may just be a coincidence. Oh, by the way, what? It wasn’t there, it wasn’t. It wasn’t there. Okay, but where were you going to be? Teaching? I mean, you know, it’s like getting your syllabus together right for your first. Are you going to teaching in the fall? I’m teaching in the second semester, so i’ll be teaching negotiations. I take the class first and then i teach in the second. Semester they make a making a new professor. Sit through the class, see that you understand how the class goes and you get a feel for what the classroom is like. Oh, man, and you get paid for that. You’re on salary while you’re doing that? Yes, falik okay, well, of course you have other responsibilities as well. You’re not just going to one, you know, just taking one class. And they i’ve been sitting on the quad for the they don’t let me off that easy. Okay? Cool. No, it’s. Very good for you. All right. So a charity without a canadian charity, the charity is in the united states. They’re both the both the college and the charity work in the united states. Ok, ok. Was that hard? Is that hard? Teo recruit charities too. Let you mess with their messaging? Yeah, that’s a great question. It definitely took a little bit of collecting initial evidence on the idea first. And i’m also part of the society for philanthropy initiative out of the university of chicago. So it’s run by john list and other economists who are centered at the university of chicago and there’s a conference every year that brings together fund-raising professionals, professionals, leading academics in economics, sociology and psychology. Two begin to think about and talk about using the insights from our fields and put them into practice. So that was a great source of connections for us when we went and tried to find field partners for our research professor john list in chicago, i think he’s been on this show, i’m pretty sure he has i’m i’m gonna go to tony martignetti dot com and search his name, but i’m pretty sure john list has been on. Yeah, that’s great, yeah, he’s a major he’s, one of the leading academic academics in the field of fund-raising so he really started the academic field of philanthropic studies and fund-raising looking at from a behavioral science perspective, his career really took off after he was on non-profit radio. So this is very auspicious for you. I don’t know if you know that this is a watershed, this watershed for you. I don’t know if you’re aware of that. Great, great. Now i have been. But now you are here. Yes, you know, gen shang. Do you know professor gen shang? I don’t know, you know. You’re not well connected, all right? We’ll have to connect you in the university environment. She’s another professor. Now it, uh i think she’s now at cambridge. The other cambridge? Not the not the knockoff. Cambridge. You’re moving to she’s. The original cambridge, i think. Pretty sure. Okay, so all right, so you recruited your charities and then what’s the next step? Yeah. What was next after that? Oh, you got a what we had a discussion about. You know what? Campaigns were upcoming that we might be able to do. Random i control trials. So that’s, where we’ve flip a coin essentially on dh randomly find everyone who’s going to receive a mail out to receive one of the treatments or the other treatment. Andi, that was actually done all by the university alumni office. So they were able to select one set of messages for the group that we randomly assigned in another set of messages for this other group. And then we were able to put these messages into the field and look at donation rates, both participation rates, so likelihood of donating to the campaign. And also the amount that people donated to the campaign. Okay. On dh it took about i think it was in the field for so we were waiting for the results for three or four months on dh. Then we were able to look at whether and how different messages affected different potential donors differently, and the charities had wealth, information or income information about the people who receive these melons right in our field study with the university office we hey, we did a little bit of guessing and well, so we didn’t have individual level wealth data, but we did have a zip code data. We were able to get the average level of well in the neighborhood that individual’s lives. We also knew how much they donated in previous campaigns, which is a pretty good indicator of wealth of someone who gives six, seven, eight thousand dollars to their university alumni office is probably a lot someone who’s wealthier than then another individual who’s giving five, ten, fifty hundred dollars over the last couple of campaigns. So we only that is an index of well, all right. That’s a good that’s. A good proxy. Ah, especially if it’s over over a period. Ah, good period of years or so that’s true. And you used ninety thousand dollars as the cut off between affluent and less affluent, right? So where we got that number is actually so those were from our more tightly controlled experiments in the field where we i went up to adults at different finds museums in vancouver and chicago. And we asked him to participate in a study who provided them with a windfall of money and prevented the opportunity. Donate either in terms of agency or communion is we’ve been kind of talking about and we measure their individual loss. Okay, so that was different. That was different. Fields, scratch that off. Actually, just emerged from our data. So wave randomly assigned everyone in our sample to see either these more achievement focused or these more community focused messages. And then we ran additional analyses looking at you know what? At what point that these messages focused on achievement really seem to be working on. We found that message is focused on achievement. Really seemed to start working at promoting giving around this ninety thousand dollar mark. So that’s, that point actually emerged from the studies that we were conducting. Okay, okay, so that so that was a different set of field research, the the ninety thousand dollar affluent level that was from the university or the or the or the charity mailing? Okay. Okay, well, by the way, what’s, your what’s, your windfall payment to participate in the research at the at the museum’s. What do you what researchers consider a windfall? Yeah. So when paul is money that you didn’t expect to get way, provided all of our participants with a ten dollar when thawed the beginning of the study. But we there’s a couple of things that we do to help people ten dollars that’s a winner money, ten dollars. A windfall. I don’t really like twenty, five hundred or five thousand or something, man. They’re underfunded, you’re badly underfunded payment. You could go for lunch or something or have a coffee. So what we actually do, though, is way. Tell people that’s their payment for participating in our study, and we put it in a foryou envelope on we tell participants to put that payment of money away. So those couple of small, small thing telling them it’s their payment for their effort in our studies and telling them to put it away and just sign for it how people on our studies feel a sense of ownership over the payment because we know that if so, then we can feel a little bit more confident, but the results will generalize to the real world because people are treating that more like their money and left life, you know, something that’s like a payment that belongs to the researchers as opposed to them. You people are pretty tricky like you. You’re really trying to pull the wool over our eyes if we’re if we’re a subject subject, yeah, it helps. It helps us feel more confident in our results if i didn’t and here’s some of our experiments all money, you know, can you make a decision with it? People are going to make a different decision then, if they feel like i’m now asking them tio part with some of the money that they’ve earned in our study, i see very wily ofyou, behavioral scientists. All right. Are you familiar at all with the research of ah, do you know the name’s, sara kiesler and lee sproule? No. Okay, old social scientists from when i went to college. But i thought you might have come across there. They were behavioral social scientists also. But i won’t dwell on there. There, the forefathers, for four founders, foremothers of your of your research, but it’s not important, okay. Okay, so all right, enough of the detail. Now what? Uh, what emerged from the the different messages flush it out for us. So what we found was that messages that focused on achievement encourage generosity among those with the greatest capacity to give so above that ninety thousand threshold that we’re talking about where’s messages focused on community. But we can all do together to help the cause, encourage generosity among those with the least amount of money in our samples. And this was true, as i said before, both when we measured individual level wealth and when participants knew they were in a study. And these findings also emerge when we conducted this research in the field with the university fund-raising office and people didn’t know that they were in a study. So we also thought that these messages focus on achievement promoted e-giving for individuals who were graduates of an elite business school in the united states um, and then that study it increased the amount that that individuals gave in the study. Now what you refer to as the communion message, by the way that’s interesting tries to work communion, huh? Why’d you choose communion instead? Of community. So this is just really a kind of jargon. Ease social. See there’s the trouble right there. Yeah. Jargon. We have jargon jail on a non-profit radio. It was the first problem, right? There’s the problem right there. Okay. Okay. So community is one way you can think about it. That’s totally fine if it’s with a lot of research and our field showing that people from different cultural backgrounds tend to think about their relationship with others in different ways. So in north american cultural context, we tend to be more gentle. We focus on this self as really standing out. Where is in more collectivist culture, such as in east asia? We focus more on fitting in, and our relationships with others are really important. Recently in the social sciences, people have started to draw parallels between these different cultural mindset and the mindset that are so secret with having more or less money. So i used the word agency and communion tow link this broader literature. But really, you can think about this in terms of agency or community that wealthier individuals tend to be more singularly focused and really wanting to stand out. We’re lost wealthy individuals tend, on average to be more focused to their community, so they tend to want to fit in with those around them. You have the gift of of ah, complete explanation and appropriate qualification, which will serve you well as a professor. A ll the professors i’ve interviewed, including john list have those gift detail and qualification were required. I know if you know that, but you’ve. You’ve acquired it through your three year study. Congratulations. All right. So so the message is that you used for the the communion. The message was let’s. Save a life together. That’s one example. Right? And then the for the individual achievement of the agency message he used you equals life saver. Those are those are a couple of examples of messages. Yeah, yes. Okay. And those would have gone out in direct mail is that is that right? There will be mail pieces. So in our initial studies, we had people in our studies read those appeals in the context of an actual experiments. And in the university fund-raising study, those messages went out in direct mail. So those messages were at the very top of what people saw. And at the very bottom, right before they made or messages like that break before they made their donation decision. Okay, okay. So, really, you know, a zeiss ed? The research applies to the affluent as well as the non affluent or less up. However you want to describe it, you want your messaging to be appropriate, and we’re introducing sort of a new variable. I think that or at least one that i have not scene which is messaging by wealth level here. Yes, that’s. Right. So i research really does show that thinking about or knowing something about the socioeconomic status or background of potential donors, i can provide one clue about the types of messages or appeals that might be more effective for for a different different groups. And again, this really fits with what we know in psychology about how well shapes the way we think about ourselves. So we know again, that’s the kind of reiterate we know that lower income individuals on average and we’re always talking about general, is to think about the world in a way that’s, more relational. How can i fit in with my community? How can i make a difference fight by being part of my group where hyre social status hyre hyre more wealthy individuals tend to think about right standing out from the crowd and how they can show their uniqueness or economy in their lives. So i think, knowing just a little bit about how well shapes the way people think about themselves is an important clue as to how we might want to frame charitable giving or messages of round fund-raising to encourage e-giving among both groups, andi, i also think that it’s important, so i think i mean, again, the idea of tailoring messages isn’t new, but i do think that this a gent iq framing this sort of focus on personal achievement or self, you know, control sort of seems teo conflict with the way that we think about charitable giving as something that together we all help an important cause. And so i think it’s important to another kind of important message embedded in this work, but sometimes we need to step beyond encouraging people to do things that have positive outcomes, like give charity or healthy for positive reasons, and instead focus on encouraging people to do positive behavior for reasons. That fit with their pre existing values on goals. I don’t know if it was your new york times op ed with your with your co researchers or was one of the pieces i read, you know, your insight could see you’re concerned about being contrary to the morality of charitable giving and that concept of community, but but i understand your concern, but we can we can help the community by tailoring the message appropriately, the way the way you’re describing, um i wanted to ask where we just have about two minutes left. Ashley so where now is your your research going to be heading? Is there going to be more in the in the fund-raising realm? Lorts yes, so i’m starting a major project now, looking at how we can encourage e-giving early on, so how can we encourage mindsets, associate with generosity and giving for kids? And what and what also our conversations? How did conversations between children and parents shape not on ly the way that kids think about the importance of giving but also shaped parents own behavior, so we want often and still in our children the important values that we care about. And we want to know how conversations about e-giving not only affect the way that children prissy e-giving but also affect care and some behavior, but they’re looking to their kids, they’re trying to instill important values to their families and in that could be reminded about the importance of philanthropy, and this interest really came out of a lot of research we did that didn’t work, trying to change people’s minds about giving or the importance of thinking about contributing back to the community, sort of later on in length that we were serving high net worth donors, individuals with hyre levels of wealth, and we found that some wealthy individuals who are more generous tend to think about their success is being drive from the situation from help from others on dh that that seemed to be powerful component on what afflict e-giving but when we tried to take that insight into the field and leverage it to encourage charitable giving were large and successful, one important question then becomes, how can we encourage this? You know, more communal mind set more community focused way of thinking early on before people become financially successful or go through education. And so have become really interested in my collaborators, and i have become really interested in serious about the rule of conversations, the powerful role of conversations, about e-giving early on, both for kids and for parents. And so those are some of the ideas that i’m going to be blurring of the next several years. Alright, excellent good explained like a true professor on, but i hope you just hope you’re not going to rob our children of their youth. We’re not gonna we’re not gonna do it let’s not go to that extent when as you as you in this children for your research work errantly designing about e-giving game. Okay e fine. And also i’m alright. Parents need not be worried toe have their children participate. All right, we have to leave it there. Actually, whillans congratulations on your new phd. You can. You can follow ashley at ashley whillans. Thank you so much for sharing and being a part of non-profit radio. Actually, thanks so much. And congratulations. Thank you so much for having me. Real pleasure. All right, take care. Your board’s role in executive hiring with jean takagi is coming up first. Pursuant, they’re infographic it is five steps to win at data driven fund-raising this infographic would probably be the on the other end of the spectrum from the type of research that we were just talking about with ashley, because this is going this distill things in, you know, five simple steps, which is not what academic research is, but while still valuable all data driven because, you know, pursuing tell you every week data driven they have, they have this infographic that will help you define your goal and what the most important metrics are and optimizing and tuning fine tuning for best results, learning through infographic, you can learn from academic research you can learn through in infographic because you are a you’re a lifetime lerner, and you’re a flexible learner, so don’t ignore the ends of the spectrum and the infographic and the peer reviewed academic research from the folks at pursuing dot com. You go there and then you click resource is then info graphics. We’ll be spelling supercool spelling bee fundraisers. You need more money for your good work. I know you do throw a spelling bee. Anybody can throw a party generic party well, maybe not. Anybody? I mean, i’ve been to some bad parties, but most anybody could throw a decent party but a spelling bee party that takes it to the next level with live music and dancing that’s a that’s, a true party and fund-raising, of course, for your because your your mission, your good work. Check out the video at we b e spelling dot com, then talk to the ceo it’s that simple. Alex greer now tony steak too. The charleston principles. My video is from charlotte, but the principles are from charleston, and i decided that they share enough common letters. First five teo to do a video inspired by charleston even though i was in charlotte and charlotte, north carolina, nicer town. I’ve been there many overnights and there when i shot the video and i’ve never been to charleston, but i can tell from the pictures charlotte’s nicer, i couldjust north carolina, i can see that i see from the pictures the charleston principles there’s a love that has nothing to do with you should’ve fast forward it best that all right, here’s, what we’re talking about charleston principles right now, it’s all about charity registration the state you know where you got to be properly registered need state where you solicit donations. All that charleston principles have some very good ideas and definitions of solicitation problem is it’s hard to tell which states have adopted them of largely, but i can help you. Check out the video at tony martignetti dot com. And that is tony’s. Take two now. It’s. Time for jean takagi on your boards role in executive hiring jean takagi he’s with us. You know him? He’s, the managing editor, attorney at neo non-profit and exempt organizations law group in san francisco. He edits the very popular non-profit law block dot com on twitter he’s at g tak g ta ke jin takagi welcome back, alt-right onen congratulations on one ninety nine. I’m looking forward to two hundred next week. Cool. Yes. I’m glad you’re gonna be calling in for with us. Thank you very much. Thank you, it’s. Very exciting. Really? One hundred ninety nine shows ago. It’s one hundred ninety nine weeks it’s it’s. Remarkable. We’re talking this week about the board’s role in hiring the executive. And i’ve i understand that there are a lot of executives in transition, i think. So tony and it looks like some surveys have confirmed that it’s certainly been an experience with some of my clients and even on boards i’ve sat on over the last couple years, and there’s, a great group called compass point out in san francisco there, nationally known as one of the most respected non-profit support centers and together with blue avocado, a non-profit online publication, they have a national survey on leadership succession in transition going on just right now. The last time they published the results was in two thousand eleven, and they found that sixty seven percent of current executive anticipated leaving within five years and ten percent. We’re currently actively looking to leave right then, and in two thousand eleven, the economic times weren’t so were so great, so sixty seven percent anticipating leaving within five years that’s a pretty staggering number. So now we’re already three years into that survey into that five year projection. Yeah, and sixty seven percent of two thirds. So if we had held this show off until two thousand sixteen, then it would have been moved. But there’s a new one coming out, you said, yeah, well, they’re they’re just starting the survey online now so you can participate on that. I don’t know the website, but if you, you know google non-profit transition survey executive transition survey, thank you, you’ll get that okay, and its compass point it’s a compass point and blew up a goddamn kottler who you’ve. You’ve mentioned blue vaccaro before i know. All right, so, yeah, two thirds of of ceos were expecting to be in transition within five years and where we’re only three years into it now. So the presumably these people are still looking. What? But boards don’t really spend enough time preparing for this kind of succession, do they? Well, you know, in many cases they don’t, and sometimes, you know, they might stay, they don’t get the chance because their executive director comes up to him and give him two weeks notice. And now, you know, the board may be used to meeting every month or every other month or even every third month, and now all of a sudden they’ve gotta ramp up their efforts and find an executive to come in in two weeks. That’s going to be really tough to do on dh, you know, again, if we say at any given time, two thirds of the non-profit executives are looking to leave their job, you know, it’s very likely that within your board term, you know, you may have an executive transition to manage, and sometimes with very little notice. So that’s that’s? Why? I think succession planning is just really a core duty of non-profit board. Well, how do we let them get away with this two week notice? I mean, the ones i typically see are, you know, the person will stay on until a successor. Is found you that’s, not your experience. Well, you know, you’re really lucky if you if you do get that situation, i think most non-profit executives are hired on at will basis. Meaning that there’s, not a contract to stay there for a given number of years. Either party can conception, rate or terminate the employment relationship at any time. And as the average, you know, employee may give two weeks notice to go on to another job there. Many executives who feel the same way that they, you know, they may feel like they own allegiance to an organization. But another opportunity comes up and it’s not going to be held for them forever. And they may want to move on. Um, and they may feel like what they gave the board really advanced notice that they might be looking for something that they might get terminated. So they may keep that information from the board until the last two weeks. Well, because all right, so that i am way in the dark because i would. I just presumed that executive directors, ceos even if small and midsize shops were not at will. But they were but that they were contract i mean, when i was a lonely back in my days of wage slavery, director of planned e-giving i was in at will employees, which means you can end it like you said, you could end at any time and so can they like, if they don’t like the color of your tie one day they can fire you, you’re at will. But but that that’s typical for for ceos and executive directors. Yeah, i think for smaller non-profits it’s very, very common. Oh, i just always assumed that these were contract positions with termination clause is and no, okay, but, i mean, you know, it’s, your practice, i’m not i’m not disagreeing with you, i’m just saying i’m okay, i’m learning something s o that’s that’s incredibly risky. So it is. It put you in that position of saying, well, i need to replace somebody immediately and i don’t you know, as a board we don’t meet very often can we even convene within the two weeks to start the process going? It’s going to be so much better if you had a plan of what happens in case you know, our executive every doesn’t give two weeks notice, and even if the executive says, you know, in your scenario, maybe a longer notice, maybe, you know, in six months, if they do have a contract at the end of my contract, i don’t plan to renew, you know, i think we should go through the process of looking for for a successor and having a plan or thinking about that plan that have just coming up with something on the fly is going to probably result in a much better choice for selection of a leader in the future and that’s going to be critical and how well the organisation operates and how the beneficiaries of your organization are going to do are they going to get the benefits of a strong organization, or are they going to suffer because the organization can’t do it? You can’t advance to commission as well as it should? No, i mean, you’re you’re calling it on the fly. I would say two weeks notice for an executive director, departing is a crisis, even four weeks notice. Yeah, in many cases, you’re absolutely right. Okay, i’m right about something. Thank you. You’ve got something right today. All right. So, um what do we what do we do, teo, to plan for this? Well, you know, i think the first thing the board has to do is start toe think about the contingencies. So what do we do and and actually want one thought that comes to mind that, uh, that you raised tony is should we get our executive director on an employment contract? If they are and that will employee do we want to walk it in? And they’re sort of pros and cons with that? If you’ve got, like, not the best executive director in the world, terminating somebody on a contract becomes much, much more difficult than if they were at will employees. So, you know, you kind of have to weigh the pros and cons, but, you know, revisiting your current executive director and the employment relationship is maybe step one, and suddenly he was thinking about, well, do you have a really strong job description that really reflects what the board wants of the executive director and the basis on which the board is reviewing the executives performance? And maybe the sort of initial question to ask in that area is do you actually review? The executive director and that the board you absolutely should. You and i have talked about that the board’s is not part of their fiduciary duty to evaluate the performance of the the ceo? Yeah, i think so. I think it’s a core part of meeting their fiduciary duties that really, you know, as a board, if you meet once a month or once every couple of months or whatever. What’s more important, you know, then really selecting the individual who’s going to lead the organization in advancing its mission and its values, and implementing your plans and policies and making sure the organization complies with the law. Taking your leader is probably the most important task that the board has, because the board is delegating management to the to that leader. Yeah, absolutely. And i think it’s often forgot naralo overlooked that individual board members inherently have no power and no authority to do anything so it’s only a group when they meet collectively, can they take aboard action? So for individuals to exercise, you know, powers on behalf of the organization that has to be delegated to them and typically the person responsible for everything is that ceo or the executive director. We’re gonna go out for a break, gene. And when we come back, you now keep talking about the process. The what? What goes into this process, including the job offer. So everybody stay with us. Like what you’re hearing a non-profit radio tony’s got more on youtube, you’ll find clips from stand up comedy tv spots and exclusive interviews catch guests like seth gordon, craig newmark, the founder of craigslist marquis of eco enterprises, charles best from donors choose dot org’s aria finger, do something that worked neo-sage levine from new york universities heimans center on philanthropy tony tweets too. He finds the best content from the most knowledgeable, interesting people in and around non-profits to share on his stream. If you have valuable info, he wants to re tweet you during the show. You can join the conversation on twitter using hashtag non-profit radio twitter is an easy way to reach tony he’s at tony martignetti narasimhan t i g e n e t t i remember there’s a g before the end he hosts a podcast for the chronicle of philanthropy fund-raising fundamentals is a short monthly show devoted to getting over your fund-raising hartals just like non-profit radio, toni talks to leading thinkers, experts and cool people with great ideas. As one fan said, tony picks their brains and i don’t have to leave my office fund-raising fundamentals was recently dubbed the most helpful non-profit podcast you have ever heard. You can also join the conversation on facebook, where you can ask questions before or after the show. The guests were there, too. Get insider show alerts by email, tony tells you who’s on each week and always includes link so that you can contact guess directly. To sign up, visit the facebook page for tony martignetti dot com. Time. Dana ostomel, ceo of deposit, a gift. And you’re listening to tony martignetti non-profit radio. Big non-profit ideas for the other ninety five percent. Got to send live listener love let’s. Start in japan with tokyo kiss or a zoo and nagoya. Konnichiwa, seoul, south korea, seoul, some someone south korea, always checking in love that anya haserot. Moscow, russia, mexico city, mexico, ireland. We can’t see your city ireland’s being masked for some reason, but we know you’re there. Welcome, welcome, ireland, and also taipei, taiwan. Ni hao, nobody from china, that’s, funny, nobody from china today, coming back to the u s we got cummings, georgia, in ashburn, virginia. Live listener love to you in georgia and virginia. Okay, gene. So now we’ve let’s say, we’ve learned that our exec is departing and let’s not make it a crisis situation, though let’s say this person is generous enough to give six months notice. So, you know, let’s, not make it a crisis. Where what’s our what’s, our what’s, our first step as the board. Terrific. And i’ll just add, even if you don’t, if you know your executive is not leaving any time soon and i think you should go ahead and start this process anyway. Oh, yeah, clearly we should be. We should have a succession plan in place. Yes, we’ve talked about it, right? Okay, yes, i think the first thing to do is get a committee together so it might include boardmember some outside experts outside with the board. If you don’t have that internal expertise and just getting different perspectives out there, some of your other stakeholders might be really important in what? You know what you want to look for in an executive in the future. So get that committee together first. Get the buy-in of the current executive director bonem so unless it’s going to be, you know, a succession plan for a termination? Yeah, we’re really unhappy with executive director, right? Let’s not get into that. Yeah, let’s get their buy-in and have them help in the process. Especially with your scenario where they’re giving us six months notice and everything is amicable. Let’s, you know, see she who knows better about the organization than the executive director that’s in place right now. So i’m getting there buy-in and help and contribution. I think it is pivotal. Does this committee have to be comprised of hr experts? Why? I think having a least one or two hr experts is going to be really helpful. But i i think it’s more than that. It’s, you need to program people who understand what the executive you know roll is with respect to advancing the program. You need the fund-raising people to know well, what is the going to do with respect to fund-raising perhaps the seeds, the lead fundraiser and some small organizations as well. So we need thio gather a bunch of different people with different perspectives and expertise to figure this out. And i think that’s a very good point to include a t least a programme expert. Now, could this committee include employees, or does it have to be sure you can i absolutely on dh, you know, you might even have have have different subcommittees in there. So eventually this is going to go up to the board. But as the the committee is doing the legwork for determining what you need an executive director and putting together a job description and, you know, perhaps, but the performance evaluation is going to be based on for the future executive director all those things can get, you know, be be aided by the contribution from several areas. Okay, okay, what are your thoughts on hiring a recruiter vs vs? Not well, you know, i think it depends upon what the organization’s resource is our and the organization should understand the marketplaces in a swell hiring two great executive director is the competitive thing, so, you know, if you’ve got a lot of resources and you’re able to you want to allocate an appropriate amount of resource is tio what i think again is making one of your most important decisions of the board? I don’t think you want to do this on the cheap at all. I’m just the same way i didn’t want you to do it on the fly or or or are in a rush matter-ness think you want to invest in this and you don’t have great expertise inside about things, about like, doing job interviews and doing background checks. On the sex thing, you know how to differentiate between one candidate and another when they all look good on paper and when they’re maybe professional interviewees, but they’re not. There may be not great leaders. How do you figure all those things that if you don’t know that on executive search firm could be a great help and it can just open up the marketplace of potential candidates as well? Especially if they, you know, decide to do a regional or even a national search, it really can ramp up hu hu you’re going see in front of you and the quality of the candidates that this election comedian the board eventually will have to choose from. Okay, does the committee now come up with a couple of candidates to bring to the board? Or is it better for the committee to choose one and bring that person to the board? How does this work? You know, i think the committee should be tasked with bringing several candidates up on sometimes it may be a multi tiered process so they might go through two rounds of screening, for example, and and at least let the board see who’s made. The first cut, and then and then, you know, present to the board, the final, perhaps two or three candidates. If you’ve got, you know, ones that are very close and in quality in terms of what the board want in an executive director, i think that’s pivotal. I wanted to add one thing, though. I’ve seen this done before, tony and i don’t really like it and that’s when. If a search committee or search consultant comes up and says, you know, to the board, tell me what you want in a good executive director, everybody you know, spend five minutes, write it down and send it to me, or you take it home and email it to me and tell me what you want. And then the search consultant collates the the the answers and then that’s, you know, the decision about that’s what’s going to be the qualities you’re going to look for. I think this needs a lot of discussion and deliberation and the value of, you know that that thought process and that really difficult thinking and getting all those generative questions out there is going to produce a much better product in terms of what you’re looking for and who you can get and how you’re going to do it. Yeah, you you send this tio use email and, you know, it’s going to get the typical attention that an e mail gets, like a minute or something, you know, it’s it’s going to get short shrift. And your point is that this is critical. It’s it’s, the leader of your organization you want do you want the contributions of the committee to be done in, like, a minute off the top of their head just so they can get the email out there in box? Yeah, definitely. We could talk about board meetings and another show, but put this at the front of the meeting and spend, you know, seventy five percent of your time talking about this. This is really, really important, okay, you have some thoughts about compensation, and we just have a couple minutes left. So let’s let’s say we’ve the board has well, i can’t jump there yet. Who should make the final call among these candidates? Is it the board? Yeah, i think it should be the board that makes the final approval, but they they’re going to put a lot of weight based on what the executive of the search committee, you know, tell them who they’re you know, the recommendation is okay, and i think that toe add one more thing to it is make sure the organization looks good to clean up your paperwork and your programming and even your facilities. Just make sure you’re going to be attractive to the candidate as well, because if you want to attract the best, you better be looking your best as well. Okay, okay. And the with respect to compensation now, we’ve talked about this before. What? What’s excessive. And there should be calms and things like that, right? So it’s really important to make sure that the board or unauthorized board committee one that composed just board members, approved the compensation before it’s offered to the candidate. Even if you don’t know that they’re going accepted or not, once he offers out there that compensation package, total compensation should have been approved by the board. And you want to do it with using the rebuttable presumption of reasonableness procedures unless you know its far below market value. Okay, if you get payed accessibly or if you pay somebody excessively, there could be penalty taxes for everybody. Including the board. Should be careful of that. We have talked about that rebuttable presumption before. Yeah. All right, jean, we have to leave that there. I look forward to talking to you next week on the two hundredth great. Congratulations again. And i look forward to it as well. Thank you, gene. Gene takagi, managing attorney of neo the non-profit and exempt organizations law group, his blog’s non-profit law block dot com, and on twitter. He is at g tak next week. Social change. Anytime, everywhere, part one with our social media contributor, amy sample ward. If you missed any part of today’s show, i beseech you, find it on tony martignetti dot com. Responsive by pursuing online tools for small and midsize non-profits data driven and technology enabled, and by we be spelling supercool spelling bee fundraisers. We b e spelling dot com creative producer is clear. Myer half family bullets is the line producer durney mcardle is our am and fm outreach director. The show’s social media is by susan chavez, and this cool music is by scott stein. Be with me next week for non-profit radio. Big non-profit ideas for the other ninety five percent. Go out and be great. What’s not to love about non-profit radio tony gets the best guests check this out from seth godin this’s the first revolution since tv nineteen fifty and henry ford nineteen twenty it’s the revolution of our lifetime here’s a smart, simple idea from craigslist founder craig newmark insights orn presentation or anything? People don’t really need the fancy stuff they need something which is simple and fast. When’s the best time to post on facebook facebook’s andrew noise nose at traffic is at an all time hyre on nine a m or eight pm so that’s when you should be posting your most meaningful post here’s aria finger ceo of do something dot or ge young people are not going to be involved in social change if it’s boring and they don’t see the impact of what they’re doing so you gotta make it fun and applicable to these young people look so otherwise a fifteen and sixteen year old they have better things to dio they have xbox, they have tv, they have their cell phones me dar is the founder of idealist took two or three years for foundation staff to sort of dane toe, add an email address card. It was like it was phone. This email thing is right and that’s why should i give it away? Charles best founded donors choose dot or ge somehow they’ve gotten in touch kind of off line as it were on dh and no two exchanges of brownies and visits and physical gifts. Mark echo is the founder and ceo of eco enterprises. You may be wearing his hoodies and shirts. Tony talked to him. Yeah, you know, i just i’m a big believer that’s not what you make in life. It sze, you know, tell you make people feel this is public radio host majora carter. Innovation is in the power of understanding that you don’t just do it. You put money on a situation expected to hell. You put money in a situation and invested and expect it to grow and savvy advice for success from eric sacristan. What separates those who achieve from those who do not is in direct proportion to one’s ability to ask others for help. The smartest experts and leading thinkers air on tony martignetti non-profit radio big non-profit ideas for the other ninety five percent.
