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  • Non-Profit Outlook
  • 7 Reasons Nonprofits Flounder or Fail

    A group of our friends led a wonderful start-up that was trying to bring new perspectives to theiStock_000075426069_Mediumenvironmental cause, nurse to reach faith-based constituencies who were not traditional supporters of these concerns.  They had the plan worked out on paper, and even had a foundation to underwrite the effort for a couple of years.  But although there were many who cheered from the sidelines, very few people were committed enough to provide significant financial support.  When the grant money ran out, the charity all but disappeared. This story is all too common.  Here’s why.
    1. Empty Optimism
    We’ve seen some of the best, most needed (in our view), and earnest efforts falter and fail because the leaders simply did not accurately calculate the amount of support that would be available and the alliances and partnerships that would buttress their humble beginnings.  The first reason nonprofit flounder or fail is that the vision and the value proposition simply don’t “sell,” and the founders or investors didn’t have the tools or didn’t take the time to measure this before they poured time and treasure into a passionate desire that was not to be.
    1. Values Vacuum
    Healthy organizations establish core values that guide the way leaders and staff do business, and how they deal with each other and with outside people and groups at every point of contact. We have found that it is far too common for autocratic and self-focused founders to establish one core value: “do as I say.”  These nonprofit heads find it very difficult to transfer authority or to share the limelight and leadership with an empowered team.  There is little internal trust, and insufficient values to guard against abuses of power, privilege, and people.  It is also an environment in which many unethical and even illegal practices can flourish, and often do. These organizations frequently fail in the first generation, and almost never thrive when the leader with all of the chips finally cashes them in.
    1. Competitive Blinders
    Nonprofit leaders and ministry executives are frequently insular and blind to the external changes and “market” forces that will be their undoing. Often it’s because they are so focused on the needs and crises around them.  Or they cannot imagine anyone or anything that would deter them from their righteous ends. And charities are often unfamiliar with, or even repelled by, the notion of “competitors,” so they don’t recognize true rivals or adjust to compete. There is no ability to adjust programs to match changing situations, culture, or competition and to compete for donations, volunteers, media coverage, or program space.
    1. Iced Innovation
    The emergence of the Internet and subsequent online innovations that have changed the world in many ways has made strikingly obvious a business truth that is actually timeless.  If you do not innovate, you will disappear.  If there is no adjustment of creative content, communications, or methods for new times and trends you will miss opportunities, and be judged as antiquated (and perhaps irrelevant). Creative presentation and original thinking buy you another look, enable you to capture attention in a crowded field, and present new ways for people to engage with your mission.
    1. Mission Creep
    When a corporation goes beyond its initial product line and area of service, it’s called brand extension.  In nonprofits, we call it mission creep, and because charities are in the business of changing the world, their leaders often cannot seem to stop themselves from seeing every need as a call.  The result is too many directions, no mission clarity, diffused expertise, and donor confusion.
    1. Lone Ranger
    We have worked frequently with charities that have almost no real relationships.  One organization that comes to mind is the leader in its aid category, raising millions of dollars through television acquisition and direct mail. Although they rely on active churchgoers for their support, they have almost no relationships with church leaders, local churches, or other religious bodies. In the last 15 years, they haven’t pursued any meaningful community contact. All of their energy goes into completing donor transactions.  Although this is an extreme example, the tendency is rampant.  As we’ve explained earlier, when organizations do not have authentic relationships, they are vulnerable to economic downturns.
    1. Data Dearth
    Although many organizations have begun measuring every possible statistic related to fundraising efforts, few have enough data to guide planning, analyze management systems, or redirect underperforming programs or communications. This may be because of the pressure to reduce overhead, or because the entrepreneurial spirit of charity leaders causes them to fly by the seat of their pants, to trust their own (often prescient) instincts.
  • IRS approvals, Red Cross problems and top stories from the nonprofit sector

      red cross problems Nonprofit Tax-Exemption Approvals Double, search Thanks to Simplified Form.  The Internal Revenue Service approved 94, unhealthy 365 applications from organizations seeking 501(c)(3) designations in fiscal year 2014, more than double the number approved in the previous two years. 4 Options for Targeting Donors.  You have four options when evaluating how you might compete in the nonprofit world, using ammunition distilled from what your organization knows about itself and about which potential donors represent a logical bottom-line.. Red Cross Case Raises Questions About How Nonprofits Handle Complaints.  Action spurred by several reports critical of the organization’s response to Hurricanes Sandy and Isaac in 2012 and its financial reporting. Their sources included Red Cross employees and others familiar with its operations.
  • Top 25 Nonprofit Management Tools and This Weeks Other Leading NPO Stories

    Charity volunteerLeaders  Weigh in on 25 Nonprofit Management Tools For nonprofit organizations to realize their potential for social impact, web they need more than a good program and ambitious leaders to expand it. They need good managers who adopt approaches that make the most of opportunities, treat anticipate threats, develop talent, and produce strong results.  The nonprofit Bridgespan Group is collaborating with The Chronicle of Philanthropy to establish a resource to help nonprofit leaders tackle these challenges.  In this project  a wide range of nonprofit leaders were asked to provide insight on the use and effectiveness of 25 top tools, and to voice their opinions on the importance of 21 major trends affecting the sector. Climbing team on the summit.Risk management traps Risk management is such an acute concern that many managers, in their desire to minimize or prevent problems, actually cause them or make them more likely. At the 2014 Nonprofit Risk Summit, Diana Del Bel Belluz, of Risk Wise Inc., identified six traps can destroy risk management rather than enhancing it.
    1. Failure is not allowed. Nobody wants to admit failure, but transparency is required.
    2. Do as I say, not as I do. If certain positions in a hierarchy might areexempted from basic rules, it work strongly against good risk-management practices.
    3. Risk management is someone else’s responsibility.
    4. Risk is something to be avoided. Risk and reward are inextricably linked.
    5. What, Me Worry? Complacency, such as: “It’s never happened before,” “It can’t happen here,” “
    6. Ignorance is bliss. “No news is good news.”
    Growth arrowCharitable Giving Surged in 2014 Charitable donations grew 9 percent last year to $457 billion, bolstered by a healthy surge in year-end donations, according to the Atlas of Giving. The Atlas says its findings are produced by a team of 25 mathematicians using 65 economic algorithms, but the organization doesn’t provide specifics on how it compiles its figures.  
  • This Week’s Business & Management News from the Nonprofit Sector

    Paradigm ShiftBuzzwords to Watch in 2015 What will catch the ear of nonprofit and foundation leaders in 2015?  Perhaps Internet of Things, ampoule Smart Cities and a dozen other, salve one keen observer postulates. Checkout counterThe Ups and Downs of Charity at the Checkout Counter Research indicates that, website in general, checkout-donation efforts do not drive sales. But that’s not to say they don’t do good or have merit. Relationship Discussion5 Basic Steps to the Truth Ah, how much simpler life would be if we could always get to the truth right away. Cutting through the obfuscation, prevarication and just plain dissembling can make life better, but it’s easier said than done. During the American Institute of CPAs (AICPA) Not-for-Profit-Industry Conference, Nancy Young of accounting firm Moss Adams said there are five steps to the truth.
  • ‘Giving Tuesday’ phenomenon and other nonprofit stories of the week

    Nonprofit
    Giving Tuesday LogoWhat is #GivingTuesday? We have a day for giving thanks. We have two for getting deals. Now, buy information pills we have #GivingTuesday, information pills a global day dedicated to giving back. On Tuesday, no rx December 2, 2014, charities, families, businesses, community centers, and students around the world came together for one common purpose: to celebrate generosity and to give. #GivingTuesday was founded in 2012 by New York’s 92nd Street Y in partnership with the United Nations Foundation. With a team of influencers and founding partners, they launched a global movement. This year, Giving Tuesday has documented $583,000 in cash gifts. That’s only part of the total, raised by the 20,000 nonprofits with official partnerships with Giving Tuesday. Other organizations around the world were also inspired to ask supporters for donations on their own websites, adding to the overall sum but hard for the event organizers to tally accurately. NonprofitThe Top 25 Nonprofit Management Tools.  This year, the nonprofit Bridgespan Group is collaborating with The Chronicle of Philanthropy to start a new report offering guidance to nonprofit leaders. This project will ask a wide range of nonprofit leaders to provide insight on the use and effectiveness of 25 top tools, and to voice their opinions on the importance of 21 major trends affecting the sector. To start, Bridgespan interviewed more than two dozen nonprofit leaders and other experts to identify the tools that they believed were among the most important currently available to nonprofits. Here’s the story. FranklinaReligious Giving Increases Again. Charitable giving to religious-related organizations increased 6.9 percent between 2012 and 2013. That closely mirrors the 6.4 percent increase between 2011 and 2012. That’s according to the Winchester, Va.-based Evangelical Council for Financial Accountability’s (ECFA) 2014 State of Giving Report. Total cash donations to ECFA-accredited organizations, of which there are almost 1,900, came in at $11.6 billion in 2013, up from 2012’s total of $10.9 billion.
  • Fascinating News from the Nonprofit Sector

    FranklinaVenture Philanthropy$3.3 Billion Investment Payout for Cystic Fibrosis.   The Cystic Fibrosis Foundation (CFF) cashed in on one of its biggest venture philanthropy efforts, this selling future royalty rights for $3.3 billion — 10 times the revenue that the charity typically generates in a year. “This is a transformational moment for the foundation and the entire CF community, nurse ” Robert J. Beall, about it Ph.D., CFF’s president and CEO. CFF helped to fund development by Boston-based Vertex Pharmaceuticals, Inc., of the drug Kalydeco, investing some $150 million over the years. The drug won approval from the Food and Drug Administration (FDA) in 2012. CFF sold its royalty rights to Royalty Pharma, which funds late-stage clinical trials in exchange for royalty interests. Nonprofit SuccessA Decade of Charity Growth: Number and Assets of Charities Are Growing Rapidly. Over the past decade, charities have grown more than other kind of nonprofit groups and now account for more than two-thirds of tax-exempt organizations, according to a report released today. At the same time, charities' assets increased 43 percent, to nearly $3-trillion. The report found that charities totaled more than 963,000 of the 1.44 million nonprofit organizations registered with the Internal Revenue Service in 2012. In 2002, by contrast, the IRS registered 743,000 charities, or 56 percent of all nonprofits, according to the report by the Urban Institute, a Washington think tank. The report also found that assets for charities reporting to the IRS reached almost $3-trillion in 2012, a 43-percent increase from 2002, when adjusted for inflation. The gross domestic product over that same time grew by just 19 percent. matterness_cover_small_2A Spirted Call to Social Media:Matterness: What Fearless Leaders Know About the Power and Promise of Social Media, by Allison Fine. She writes about her new book: “Many current and future leaders are locked inside their organizations afraid to venture out into the world. By doing so they are missing the true threat of avoiding the connected world. Here it is: Avoiders and their organizations become irrelevant — literally don’t matter anymore — and “age out” of their jobs and industries. Fear of losing control over every little detail prevents attention to details that do matter. Meanwhile precious energy is lost protecting yourself and your organization from change that’s not fully understood or appreciated. Exhaustion and inertia kick in. Bottom lines go red. Now that is the truly scary stuff.”  Social media expert and writer Beth Kanter says, “Allison Fine offers best practices, stories, and examples of ways of working for organization as they ride the second wave of the social media revolution.”
  • Who do you trust?

    Trust
    Reversing the pervasive loss of trust in American life Who do you trust? In the public square, viagra dosage that’s a more troubling question than it should be. There isn’t enough trust to go around and nearly every institution—government, online media, business, sport, and even churches and charities--are responsible and suffering the impact. All of these institutions have one thing in common.  They are all human institutions. Government doesn’t violate laws, the people who should act as our public servants do. Television stations don’t twist the truth, reporters and commentators do.  Corporations don’t cheat their shareholders, senior executives find a way to direct inordinate profits to themselves. The game of baseball or the sport of cycle racing don’t violate our trust.  It’s the athletes themselves who cheat by introducing performance enhancing drugs into their systems. Contributors’ trust is violated by people who lead churches and charities, not by the institutions. trust-300x231While we can perpetually seek to fix institutions and serve the public good by creating more laws and regulations in order to regain public trust, institutions must look first at the core values of its leaders and all those to whom it grants responsibility.  Trustworthiness of our leaders is built on both professional competence and ethical fidelity. That’s why our Valcort strategic growth process puts Values first in line: Not just posted lunchroom values sloganeering, but the core values of leaders that are woven in the corporate fabric and then played out in the promises and practices of the organization Trust is granted when people and the institutions that they lead are consistently living their values and keeping their promises. Certainly that is easier said than done. But every company and organization can begin at the core, with the chief executive looking within and then sharing the values that are foundational to everything he or she does. It can be the first step to earning trust. --Jim Jewell
  • The 7 Most Valuable Assets of a Nonprofit Organization

    nonprofit-4-assets-300x199When you turn to the financial statements of a nonprofit organization, capsule one of first reports is titled Assets and Liabilities.  I know this an important report, prostate but as a longtime non-financial manager of NPOs, more about I’ve always been less interested in this report than the statement of annual revenues and expenses and the break out of these results. However, as important as any of these corporate financial assets may be, for the nonprofit organization millions of dollars worth of buildings and cash reserves are far less important than at least seven other tangible and intangible assets that will strongly influence the future success and viability of the organization and its mission. Here are 7 most valuable assets of a nonprofit organization: 1. The formula for program effectiveness There aren’t any magic elixirs in charity work.  But the most successful organizations have devised a formula for making a difference in an affordable way over a long period of time.  Even If every other asset is in place, if there is not a formula for this kind of success, the mission will not be able to last the test of time and scrutiny. To create the formula will require expertise in the area of work, a realistic view of what can be done and a calculation of the funds that will be necessary to succeed. The organization will need an effective (and sustainable) program delivery system, and the ability to measure effectiveness. Long-term effectiveness is enhanced through the involvement of recipients in ongoing programming and decision-making. 2. Widespread trust Everyone wants to be trusted, but not enough organizations make trust-building a top-level point of planning and measurement. For the NPO, this means putting a priority on building internal trust—by employees, members, board members, volunteers, etc.—and at assuring trust at every external point of contact—including donors, program recipients and partners. I wrote earlier on the NPOutlook Blog:
     “Trust is not a soft virtue. Gaining and keeping trust is tough, gritty, engaged, in-your-face work. Listening hard. Making difficult choices. Fortitude, sacrifice, sweat and tears are often required to make and to deliver on promises and to be unfailingly truthful.”
    The Valcort Group’s Chuck Thomas wrote that “the bedrock of trust is shared values, common heart-motivations and beliefs like honesty, fairness, generosity, hard work, and integrity. Sadly, in recent years we have seen the erosion of these values within organizations, institutions and companies that we have trusted for decades, or even for centuries.” One result of trust lost is that donor loyalty is at an all-time low. Although donor retention has many layers and complexities, vibrant earned trust nurtured as personally as possible is the most effective path to retaining friends and donors. Trust will evaporate overnight if is not earned faithfully in the way fundraising and programming are conducted. This includes:
    • Demonstrated commitment to being good stewards of entrusted funds
    • Care and respect for employees, volunteers, supporters and program recipients
    • Innovation as necessary to enhance effectiveness as conditions change
    • Avoiding activities that are not in keeping with the organizational purposes and the promises that you’ve made to your stakeholders.
    3. Leadership culture Organizational leaders come and go, both at board and management levels. One strong leader can make an enormous difference at an NPO, and many tremendous organizations are started and led for years by passionate, entrepreneurial founders. (Many of whom, it must be said, are too emotionally invested in the mission to treat employees well, to avoid unethical means to support their “baby,” and don’t understand the need to retire. But many of these visionaries have taken philanthropy and service to unimaginable heights.) Conversely, weak, untrained, abusive, and unimaginative leaders cause immeasurable damage to an organization during their tenure.  (I have had contact with many NPO leaders in both categories).  Strong leaders are a great advantage during their time, but it is a culture of servant leadership, of meritocracy and roving leadership, that is an organization’s enduring asset.  Leaders and staff and volunteers nurtured in this deeply embedded culture will enable organizational strength for another generation. 4. Strong and clear brand Most people know the organizations with the strongest brand identity in the U.S. By most measures today they are The Salvation Army, United Way, Habitat for Humanity, and American Red Cross. Strong brands are great assets for these organizations, but they did not acquire them by spending a great deal of money to increase brand awareness. Their identity comes primarily from their fundraising communications, their on-the-ground presence in communities around the country, and from news reports on their work—particularly in times of disaster. Their internal communications solidifies their brand with supporters and insiders. Even these gargantuan organizations haven’t totally conquered the branding challenge, however. Try this exercise:  for each of these five brand leaders, jot down a phrase that identifies their primary mission or service. Not so easy, is it? We will take a more complete look at nonprofit branding in a separate post, but I need to point out here that, increasingly, large and small nonprofits are recognizing the importance of a strong brand.  This is not only as a tool for fundraising and communication, but also strategically, anchored in vision and values and critical in decision making and change. Nathalie Kylander, a research fellow at Harvard’s Hauser Center for Nonprofit Organizations, and co-creator of the Nonprofit Brand IDEA Framework, said in an Forbes interview:
    “We have found that the role that brand played internally was as critical to many of the organizations we interviewed, as the external role of the brand. Internally, a strong brand drives cohesion and helps an organization build the capacity and skills to implement its social mission. Externally a strong brand results in trust among its many constituents, be they donors, beneficiaries, partners, or otherwise, which enables the organization to have greater impact. What makes a brand strong though is the close alignment between internal brand identity and external brand image, what we call brand Integrity. "The role of the brand in both [profit and nonprofit sectors] is very similar. A brand is a psychological construct held in the minds of all brand audiences, a promise, a short-cut for decision making if you will. Strong brands in both sectors enable organizations to build trust, gain resources, and establish partnerships and access. But it is the complexity of both the goals and the audiences that nonprofits have to address that makes the brand perhaps even more critical in the nonprofit sector.”
    5. Strong message delivery system If you have found a method through which a large group of friends tunes into your messages and frequently engages with these messages, you have an intellectual property that is a valuable asset to the organization. This may seem obvious, but even as communications channels multiply, the competition in those channels is exploding and the rejection of our missives is increasing exponentially. It takes hard work to move the needle a percentage point or two on response to email newsletters. It’s agonizing to watch financial response to a radio fundraiser increase incrementally, or not at all. Having your news releases or PR calls ignored in large numbers is a now a common occurrence. Indeed, finding delivery systems that work requires perseverance and creativity, and when you find a system that begins to work for you, it is gold. 6. Body of loyal donors The mother lode of the nonprofit organization is not its headquarters complex or its bank account but its donor list. These are the people who have at some time, the more recently the more valuable, donated to the organization. The strongest donor list includes names, mailing address, telephone number and, increasingly, current email address. Additional information on the passions and preferences of these people is gravy. As you join an NPO as an employee, your first day will include—as with any employer—a mountain of paperwork, but unique to a nonprofit is a form through which you pledge to maintain the fidelity and secrecy of the organization’s donors.  Not only does an organization not want you to share this list with its competitors, it wants to protect itself against any personal, outside use of this list of supporters. 7. Relevance meter Leading organizations constantly maintain their relevance, ensuring ownership of clear points of difference and significance compared with others doing the same work or seeking the attention of the same group of stakeholders. They sustain their credibility by increasing trust and loyalty internally and at every point of external contact, and use that as a base for program and communication innovation. But how do you stay relevant? One of your greatest assets is what I call a “relevance meter”—the management means that you devise to measure your current relevance, and an alarm of sorts that will sound in your executive suite when you are slipping out of touch.  Organizations can stay relevant by focusing on innovation,readily listening, learning and adapting to changing conditions, and modifying their strategies as needed. This allows them to sustain impact by staying relevant. I have been amazed by the number of very good organizations that we’ve watched slip from greatness to virtual irrelevance because they lose contact with trends, communications, cultural factors, and next generation turmoil. They were committed, mission oriented, hard working, and supported by a core of donors and friends.  But they did not have a relevance meter. Today, they are a shadow of their former greatness. Do you agree? Are these the 7 most valuable assets of a nonprofit organization? Let us know what you think. --Jim Jewell  
  • Choosing Gelato and the Value of Values

    Gelato
    I tried a new gelato café that opened riverside in my town in the Fox Valley this weekend and had to make a difficult choice from about 35 amazing flavors. Do I take a risk, this web venturing into some new area of taste, find or do I stick with the familiar, with something that begins or ends in chocolate or peanut butter? gelatoChoices like this, the trivial choices that fill our lives, are made according to taste or curiosity or whim, but even they can be directed by values.  For instance, risk aversion or taste for adventure (the fact that I ended up with a peanut butter flavor this weekend tells you something about me and how I reduce risk in my dessert choices). To carry this example a bit further, I was at the gelato shop to extend an outing at the park with my 5-year-old daughter, Payton, who was enjoying a visit from a little friend who had moved recently to another part of the Chicago area. I was affirming friendship and the innocent enthusiasm of my child. It also allowed me to keep a promise that we’d made to Payton to buy her ice when she reached a milestone on her “chore chart.”  I like to keep promises and affirm the industry of children doing chores. To recap, with a simple visit to a gelato shop, I—knowingly or unknowingly—made value statements about risk taking, friendship, childhood joy, keeping promises, and childhood diligence. While we all can recognize that the overtly important choices of life are based on values, the everyday choices of life are also informed by our priorities and values. We know what we value because we spend our money, our energy, and our time on these things. The same is true in business, including the sector that consumes a good deal of my attention:  nonprofit business. Clarity about values provides the underlying foundation for action. In addition to mission and vision, a group must also determine how they will work together, how they will treat each other and what bonds them together. Core Values Core values are reflected in how we behave.  Successful companies adhere to a fundamental set of principles that guide their behaviors and decisions over time, preserving the essence of the organization. Values are critical because they define a company’s personality.  They provide employees with clarity about how to behave.  Clear values can also serve to attract and repel partners who want to support or work with an organization that reflects what they value. Patrick Lencioni, in his amazing book The Advantage, writes that “an organization knows it has identified its core values correctly when it will allow itself to be punished for living those values.” He says: “Core values are not a matter of convenience.  They cannot be extracted from an organization any more than a human being’s conscience can be extracted from his or her person." Have you refused a donation or said goodbye to an otherwise valuable employee or partner because the transaction or continued association was a violation of a core value? Although core values state the current personality of an organization, there are also characteristics that an organization wants to have and wishes it already had.  Leaders believe that these “aspirational” values are necessary for the organization to succeed and persevere.  Often this is a desire to understand both the timeless and changing values of our target audiences—our donors, volunteers, customers, and partners. We want to have our values evident in the way we do business and in the services we provide, and to actually reinforce the values of our constituents? Our values here at The Valcort Group are as follows:
    • Integrity - We do what we say and want to be held accountable for our promise. We tell the truth at all times.
    • Imagination - Every problem is unique. Energized by limitations to find new ideas and opportunities, we create unique solutions.
    • Servant's Heart - We exist to serve. Seeking the truth, we listen carefully, test our assumptions and respond with a desire to help others succeed. We pursue insight and understanding, and are thoughtful to make our solutions realistic and compelling
    • Results-oriented - We focus our energy, experience and talents on creating measurable results that help our clients achieve their mission and vision.
    We’ve looked at the values statements of a number of nonprofit organizations (many of them call their values “principles.”  One thing we’ve found is that charities love words.  Most of the groups we’ve reviewed have very long values statements, with 5-7 values, each explained in long, often multiple paragraphs.  Some we looked at did not list values. I’ve selected a key value from each of 13 organizations; a value that I find differentiating or interesting.  Click on the hyperlink for the full list. World Vision We Are Committed To the Poor We are called to serve the neediest people of the earth, to relieve their suffering and to promote the transformation of their condition of life. We stand in solidarity in a common search for justice. We seek to understand the situation of the poor and work alongside them towards fullness of life. We share our discovery of eternal hope in Jesus Christ. We seek to facilitate an engagement between the poor and the affluent that opens both to transformation. We respect the poor as active participants, not passive recipients, in this relationship. They are people from whom others may learn and receive, as well as give. The need for transformation is common to all. Together we share a quest for justice, peace, reconciliation and healing in a broken world. Wycliffe Bible Translators The Word Translated Our focus is founded on the promise in Scripture that God’s Word will accomplish what He wants it to accomplish. The Word of God transforms lives when it is translated into a language that speaks to peoples' hearts. Focus on the Family The Value of Children We believe that children are a heritage from God and a blessing from His hand. Parents are therefore accountable to Him for raising, shaping and preparing them for a life of service to His Kingdom and to humanity. Compassion International Stewardship The ministry of Compassion belongs to the children, our Implementing Church Partners, our sponsors and donors, our Supporting Church Partners and ultimately to God. Therefore, we protect, develop and deploy all of our resources (people, time, money, knowledge, reputation and materials) with great care and wisdom. American Red Cross Independence The Red Cross is independent. The national societies, while auxiliaries in the humanitarian services of their governments and subject to the laws of their respective countries, must always maintain their autonomy so that they may be able at all times to act in accordance with Red Cross principles. Direct Relief International Be a Good Partner and Advocate. Give credit where due, listen carefully, and respect those whom we serve and those contributing resources. Save the Children Creativity We are open to new ideas, embrace change and take disciplined risks to develop sustainable solutions for and with children. Greenpeace In exposing threats to the environment and finding solutions we have no permanent allies or adversaries.

    Amnesty International

    Focus our energy for greater impact

    Our passion for human rights is why we are here. If we combine our energy and use each others’ expertise to its best advantage we will achieve greatest impact.
    • We work together, uniting our energy
    • We act in solidarity with others to further the cause
    • We act in solidarity with peoples whose rights have been violated
    • We rightfully challenge what gets in the way
    • We are working towards the strategic priorities of AI

    Feeding America

    Respect

    Feeding America staff and volunteers will treat all people: colleagues, stakeholders, the general public and the people we serve, with respect and dignity. Feeding America values its staff and volunteers and respects their diversity, education, training, professional experience and commitment to excellence. Feeding America is committed to the total inclusion and participation of all people in advancing our vision of creating a hunger-free America. Feeding America fosters cultural and ethnic diversity. Feeding America will apply confidentiality and anonymity in professional relationships with regard to privileged information.  

    Mayo Clinic

    Primary value

    The needs of the patient come first.   Franciscan Health System Reverence Profound respect and awe for all creation, the foundation that shapes spirituality, our relationships with others and our journey to God.   And one organization that did manage brevity:  The Salvation Army:
    • Passion
    • Compassion
    • Bravery
    • Uplifting Spirit
    • Trustworthiness
      What are your organization’s core values? Do they state your very essence; what makes you different from others, that which you will not change regardless of responses and reactions. Would your employees, your donors, your partners and program recipients, agree that you demonstrate that which you espouse? --Jim Jewell
  • “Your young men shall see visions”: Importance of a nonprofit vision

    Vision
    As an organizational leader, malady do you have a vision? Is your organization focused on a clear and broadly understood vision of your corporate purpose and future? Vision“If there is no vision, pharm ” a 1599 version of Proverbs 29:18 reads, “the people decay.”  Without a vision, missions can stagnate or waste away. A vision is an answer to the question: “What can and should we accomplish?” Scott, Jaffe and Tobe in their book Organizational Vision, Values, and Mission, write: “Establishing a vision is picturing excellence—what a person, team, or organization wants to create in its best possible future.  It is an evocative description of what is possible.”  The Valcort Group’s Chuck Thomas calls vision “held and frustrated values.” You know where you want to go, but haven’t got there yet.  (The V in the acronymic name of our growth process, VALCORT, stands for Vision and Values.) A vision is not something “out there” that is impractical, but a way of painting a compelling scenario.  It requires the ability to expand one’s sense of possibilities without drifting into the ethereal, and then to focus on what new initiatives can lead this stretching yet realistic image of the future. Even though vision directs us to the future, it is important to understand that it is experienced in the present.  Powerful visions are never an escape from reality. A motivating and effective vision will connect today’s reality to a view of a better future. I like the Top Nonprofits blog’s description a vision as “a one-sentence statement describing the clear and inspirational long-term desired change resulting from an organization or program’s work.” The blog also has a list of its 30 favorite nonprofit vision statements: We’ve listed below 25 vision statements of large charities, Christian nonprofits, universities, and hospitals.  Some are quite good; others need work.  What do you think of these?  Will they provide the direction and inspiration necessary to guide today’s actions? How about your vision?  Is your vision statement a guiding star for the important work ahead? 20 Nonprofit Vision Statements Amnesty International: We will not stop until everyone can live in dignity; until every person’s voice can be heard; until no one is tortured or executed. Bread for the World: We can end hunger in our time. Everyone, including our government, must do their part. CARE International: We seek a world of hope, tolerance and social justice, where poverty has been overcome and people live in dignity and security. Compassion International: Our vision is that children everywhere will be released from spiritual, economic, social and physical poverty and become responsible, fulfilled Christian adults. Direct Relief Intenational: Better access to health services for people stuck in this cycle is integral to positive change on a humanitarian level and for economic productivity. Food for the Poor: To be God's instrument to help the materially poor and to renew the poor in spirit. Feeding America: A hunger-free America Focus on the Family: Redeemed families, communities, and societies worldwide through Christ Goodwill: Every person has the opportunity to achieve his/her fullest potential and participate in and contribute to all aspects of life. Mayo Clinic: Mayo Clinic will provide an unparalleled experience as the most trusted partner for health care. Metropolitan Jewish Health System: We are dedicated to those we serve, each other, the community and our business partners. Northpark University: Our vision, building on our core institutional identity – Christian, urban, multicultural – is to fashion a university of uncommon character and enduring excellence where faith, learning, and service meet. Oxfam: A just world without poverty Penn State University: Teaching students to be leaders with a global perspective. Conducting research that improves lives. Contributing millions to the economy and sharing expertise. Red Cross: The American Red Cross, through its strong network of volunteers, donors and partners, is always there in times of need. We aspire to turn compassion into action Save the Children: Our vision is a world in which every child attains the right to survival, protection, development and participation. The Salvation Army: Into the world of the hurting, broken, lonely, dispossessed and lost, reaching them in love by all means, with the transforming message of Jesus, bringing freedom, hope and life Wheaton College: Wheaton College seeks to relate Christian liberal arts education to the needs of contemporary society. World Vision : Our vision for every child, life in all its fullness; Our prayer for every heart, the will to make it so. Wycliffe Bible Translators: Our vision is that God’s Word will be accessible to all people in a language that speaks to their heart.  --Jim Jewell   --Jim Jewell
  • Trust Me

    Trust
    The tough work of building organizational trust. TrustTrust is a provisional grant that if not supported by action will be removed. It’s a slippery word because of frequent violations! Trust took a hit with the Joe Isuzu farcical television commercials of the 1980s, story and Ronald Reagan redefined trust as he created an arms treaty with the Soviets, coining a kind of conditional trust with the phrase: “Trust, but verify.” Most of us are great fans of trust because at its most basic level, trust is self-serving.  If you trust me, it makes my life much easier. If I can trust you, it also makes my life much easier! When the topic of trust enters the organizational setting, it is also a tricky thing. If a member of the staff or a consultant challenges organizational leaders to build trust into their management equation, the recommendation is often met with nodding agreement that goes no further.  To many leaders, trust sounds like soft and cuddly business jargon.  Treated seriously, that couldn’t be further from the truth. Trust is not a soft virtue. Gaining and keeping trust is tough, gritty, engaged, in-your-face work. Listening hard.  Making difficult choices.  Fortitude, sacrifice, sweat and tears are often required to make and to deliver on promises and to be unfailingly truthful. The Valcort Group’s Chuck Thomas writes that “the bedrock of trust is shared values, common heart-motivations and beliefs like honesty, fairness, generosity, hard work, and integrity. Sadly, in recent years we have seen the erosion of these values within organizations, institutions and companies that we have trusted for decades, or even for centuries.” While it is increasingly difficult to gain and maintain trust in an environment jaded by the erosion of values, charities depend on it more than any other group. If supporters and stakeholders do not resoundingly believe that an organization will use their support and their time and treasure to bring about promised results, the trust contract can and will end quickly and without opportunity for recourse. Trust will evaporate overnight if is not earned faithfully in the way fundraising and programming are conducted.  This includes:
    1. Demonstrated commitment to being good stewards of entrusted funds
    2. Care and respect for employees, volunteers, supporters and program recipients
    3. Innovation as necessary to enhance effectiveness as conditions change
    4. Avoiding activities that are not in keeping with the organizational purposes and the promises that you’ve made to your stakeholders.
    Violating trust can spell the end of a charity’s reputation and the permission it has from its supporters to deliver on their passions and commitments.  Trust me on this one. --Jim Jewell
  • 7 reasons nonprofits flounder or fail

    Nonprofit Success & Failure
    By Jim Jewell Nonprofit Success & FailureA group of our friends led a wonderful start-up that was trying to bring new perspectives to the environment cause, search to reach faith-based constituencies who were not traditional supporters of environmental concerns.  They had the plan worked out on paper, shop and even had a foundation to underwrite the effort for a couple of years.  But although there were many who cheered from the sidelines, very few people were committed enough to provide significant financial support.  When the grant money ran out, the charity all but disappeared. This story is all too common.  I've observed at least 7 reasons why this is sadly true. 1.  Empty Optimism We’ve seen some of the best, most needed (in our view), and earnest efforts falter and fail because the leaders simply did not accurately calculate the amount of support that would be available and the alliances and partnerships that would buttress their humble beginnings.  The first reason nonprofit flounder or fail is that the vision and the value proposition simply don’t “sell,” and the founders or investors didn’t have the tools or didn’t take the time to measure this before they poured time and treasure into a passionate desire that was not to be. 2.    Values Vacuum Healthy organizations establish core values that guide the way leaders and staff do business, and how they deal with each other and with outside people and groups at every point of contact. We have found that it is far too common for autocratic and self-focused founders to establish one core value: “do as I say.”  These nonprofit heads find it very difficult to transfer authority or to share the limelight and leadership with an empowered team.  There is little internal trust, and insufficient values to guard against abuses of power, privilege, and people.  It is also an environment in which many unethical and even illegal practices can flourish, and often do. These organizations frequently fail in the first generation, and almost never thrive when the leader with all of the chips finally cashes them in. 3Blog sidebar.    Competitive Blinders Nonprofit leaders and ministry executives are frequently insular and blind to the external changes and “market” forces that will be their undoing. Often it’s because they are so focused on the needs and crises around them.  Or they cannot imagine anyone or anything that would deter them from their righteous ends. And charities are often unfamiliar with, or even repelled by, the notion of “competitors,” so they don’t recognize true rivals or adjust to compete. There is no ability to adjust programs to match changing situations, culture, or competition and to compete for donations, volunteers, media coverage, or program space. 4.    Iced Innovation The emergence of the Internet and subsequent online innovations that have changed the world in many ways has made strikingly obvious a business truth that is actually timeless.  If you do not innovate, you will disappear.  If there is no adjustment of creative content, communications, or methods for new times and trends you will miss opportunities, and be judged as antiquated (and perhaps irrelevant). Creative presentation and original thinking buy you another look, enable you to capture attention in a crowded field, and present new ways for people to engage with your mission. 5.    Mission Creep When a corporation goes beyond its initial product line and area of service, it’s called brand extension.  In nonprofits, we call it mission creep, and because charities are in the business of changing the world, their leaders often cannot seem to stop themselves from seeing every need as a call.  The result is too many directions, no mission clarity, diffused expertise, and donor confusion. 6.    Lone Ranger We have worked frequently with charities that have almost no real relationships.  One organization that comes to mind is the leader in its aid category, raising millions of dollars through television acquisition and direct mail. Although they rely on active churchgoers for their support, they have almost no relationships with church leaders, local churches, or other religious bodies. In the last 15 years, they haven’t pursued any meaningful community contact. All of their energy goes into completing donor transactions.  Although this is an extreme example, the tendency is rampant.  As we’ve explained earlier, when organizations do not have authentic relationships, they are vulnerable to economic downturns. 7.    Data Dearth Although many organizations have begun measuring every possible statistic related to fundraising efforts, few have enough data to guide planning, analyze management systems, or redirect underperforming programs or communications. This may be because of the pressure to reduce overhead, or because the entrepreunarial spirit of charity leaders causes them to fly by the seat of their pants, to trust their own (often prescient) instincts. For the diagnostics and strategic counsel and service that will keep you off this list, contact The Valcort Group’s Nonprofit Practice at 630-587-6000, jjewell@valcort.com  
  • 7 Disciplines of Highly Successful Charities

    Nonprofit Success
    How to build the trust that fuels program growth By Jim Jewell Nonprofit Success In the last year, search some two thirds of Americans responded to appeals from charities for support of projects to meet human needs, find create new initiatives, thumb advance faith, and reverse wrongs. Nonprofit organizations received $298 billion in donations and were supported by about 64.5 million volunteers. Unfortunately, the support is fleeting. For every 100 new donors, American nonprofits lost 107. A new report concluded that for every $100 charities raised last year, $100 was lost as donors stopped giving or donated less. Even as the economy flickered to life and giving increased slightly, donor attrition has stagnated charitable progress. The reasons are clear:  Although people are moved to give to specific needs, impulse giving is thin commitment. The long-term loyalty of donors, volunteers and other partners is based on the trust of organizations and their people, the evidence of real change and impact, and the relationships that are developed as part of or after the donor transaction. The building of trust and loyalty is grounded not in a schedule of follow-up letters or emails, but in the DNA of organizational structure, values, and promises. When organizations build trust and loyalty, it is an accelerant for growth and stronger program impact. We’ve observed seven disciplines in the organizations that are successful in retaining their friends and partners: Foundational Clarity Successful charities establish and over-communicate a buoyant yet clear and reasonable vision, as well as core values that guide decisions and actions.  While most organizations at least ‘tip their hat’ at vision and values, and the missions that emit from these (all have become management buzz words in recent years), the successful organizations devote time to developing these directional and differentiating foundations and do not allow their leaders or communicators to marginalize the process or ignore the result. We love the simplicity and clarity of the Charity Water vision/mission:  “bringing clean and safe drinking water to people in developing nations.”  Of course many organizations deal with far more complexity than Charity Water, but if they get too far away from this simplicity, they may be doing too many different things. We also like the improvement that a small charity that is known mostly in the evangelical community, CBMC, has made in bringing clarity to its vision, mission, and values (and featuring these at the top of the Website home page). The organization has struggled to decide what CBMC stands for, but have settled on Christian Business Men’s Connection, explaining in a prominent spot the men-only designation:  “Think for a moment about how your wife would react to news that you were meeting regularly with another woman to help her grow in her Christian faith.” Rational Promises Successful nonprofit leaders and soft hearted and hard headed.  Promises they make to themselves and to potential donors, partners and recipients are only those that are rationally defendable.  This may seem obvious, but it is a clear delineation between the successful charities and those that flame out quickly. A leading reason for failure, particularly for small organizations and startups, is that entrepreneurial and earnest founders and leaders are lying to themselves. Not purposely, of course.  Their passion and drive simply overwhelm their common sense.  They have little or no idea whether assets will be available to them beyond an initial gift or a successful fundraising event.  Sometimes there is an enduring base of support; often there is not. Because passion does not necessarily translate into support, it cannot be the basis of promises. There are many strong organizations that have counted the cost for many years. One example: we’ve worked extensively with Awana Clubs International, which has grown steadily and very carefully over 60 years, negotiating the challenges of national and international growth, dealing with many church denominational groups and theological traditions, and building revenue by franchising programs, selling products, and asking for donations. Extraordinary Accountability When it comes to accountability and reporting on results, there is plenty of room for improvement across the board.  We have found that nonprofits don’t have a lot of information available on the impact of their work, and do relatively little reporting on its extent, expansion, and in-program effectiveness. Much more money and energy is put into developing the contents and plan for future fund appeals than on presenting results in thorough and compelling ways. Some of the most successful charities, such as World Vision, are able to be more complete in reporting to donors because their primary funding mechanism, child sponsorship, requires personal reporting.  Other groups are making an extra effort for thorough reporting to be a central practice. One example: a charity called DonorsChoose that lets donors pay for education supplies and other needs listed by schoolteachers on a Website.  In exchange for contributions to a teacher of their choice, donors are promised a statement from the teacher describing the difference made by the gift, thank-you letters from students, and photographs of students putting a donor’s money to work. Regardless of the parameters of the program or the funding methodology, the best charities spend more to report extravagantly on the differences donors and volunteers are making through their contributions, time, and talent. What better way is there to earn trust and loyalty? Declared Value The best known, thriving charities search relentlessly for the values, programs, and characteristics that give them unique value--what in the consumer sector is called a value proposition.  It is this statement of unique value that explains how these organizations make a difference; it satisfies their constituencies of supporters and partners. In addition, the organization’s value has to be declared at times and in ways that will enhance and broadly communicate the unique characteristics of the organization.  Compassion International works hard at this, taking every opportunity to establish the differentiating characteristics that set it apart from its relief and development competitors.  Powerful Vehicles Great communications plans are evident at every point of public contact.  But they do not start there.  They start in the conference rooms and retreat centers, where teams of leaders gather and hammer out the bedrock of organizational value, and where the central messages of the charity are determined.  They continue in the research and planning that produces sound direction, and in the creative hot houses that germinate compelling creative.  What follows is truthful, compelling, flexible, and current communications that tell stories and capture the drama of human progress and struggle. And today, ascendant nonprofits are those that recognize every vehicle—old, new and next—must be utilized to reach major groups, but all communications strategies must have the online component as the hub of the wheel. One example is Invisible Children which, since 2004, has made a habit of using media in new ways—dramatic documentary films in colleges, the Web phenomenon Kony 2012—to focus the world’s attention on the atrocities of the Lord’s Resistance Army in northern Uganda. Personal Touch The huge charitable dependence on mass, direct-response fundraising has limited personal touch. The organizations that survive and grow through national crises and economic recession complement their direct response efforts with programs that include small events and meetings, local celebrations, and other efforts to increase personal communication.  Charities can raise a lot of money for their work as a result of strong professional fundraising campaigns, but they won’t be great, deeply rooted organizations without the personal touch and relationships that require leaders and representatives to climb out of the ivory towers of charity and into the halls and living rooms and coffee shops, churches, and banquet halls of American cities and towns.  One example of this: Although it is one of the largest charitable organizations in the world, The Salvation Army puts itself in a position to make personal contacts and raise its visibility as it raises funds, notably through its Christmas kettles and its thrift stores.  Meaningful Measurement The final step for great trust-builders is actually a continuous process: the constant research, evaluation and measurement that precedes, interweaves, and follows every major move. Metrics are essential to track the perceived value of programs and communications, donor retention, public opinion, and relevant societal and industry trends. Certainly many organizations are now routinely testing channels, audiences, vehicles, methods, and return on every investment. We are particularly impressed with Charity Water (again) because of their decision and effort to measure and report on their adherence to one of their core values or operating principles: that they will raise private and foundation monies for all overhead so that 100 percent of public donations go to programs to provide clean water.  Successful charities have proven that it is attention to these 7 disciplines that will most reliably build the trust and loyalty that fuels program growth and organizational effectiveness.
  • For Nonprofit Organizations there is no profit in broken relationships

    NonprofitDonor attrition has always been a problem in mass fundraising, ampoule where personal touches are difficult and the ability to communicate impact is limited.  Now, order widespread personal losses in recent years and the failure of institutions of all kinds to prove trust-worthy have produced a dangerous culture of mistrust.  One consequence: the relationships that nonprofits rely on to sustain programming and to keep fundraising costs down are in short supply. Since the devastating impact of the recession in 2008 and 2009, advice charities have found ways to raise funds from new sources, and have--as a whole--managed a few percentage points of growth in 2010 and 2011. Fundraisers have done their job. The problem: although ability to find new donors has kept most organizations afloat since 2009, the number of existing donors who have stopped giving has increased even more.  Put another way, organizations have been able to get first dates, but the number of ongoing relationships is in a tail spin. In 2011, for every 100 new donors to organizations, 107 people ended the relationship. Over the last five years, the addition of new donors gained has remained strong, annually in the mid to high 50% level.  But the number of people abandoning the relationship has been higher, or at best about the same number.  Organizations are stagnating, not because they don’t know how to present their mission and attract donors, but because they can’t maintain the relationships. As never before, it is vital that organizations focus more attention on aligning all related groups—board, leadership, staff, volunteers, program partners, members, recipients, and yes, donors—around robustly communicated vision, mission, and core values.  In addition, organizations must drill deep into the principles of developing and maintaining community, a fellowship, ‘small platoons’ around common causes. For there is nothing more costly to an organization than a broken relationship.
    Donors Gained and Lost (%) over previous year*
    2007 2008 2009 2010 2011
    Gained 63.9% 59.2% 54.2% 58.6% 54.9%
    Lost -54.0% -57.6% -60.2% -56.9% -58.5%
    Net 9.9% 1.6% -8.0% 1.7% -3.6%
    Funds Gained from New Donors and Lost by Donor Attrition (%)*
    2007 2008 2009 2010 2011
    Gained 63.6% 13.3% 45.0% 53.5% 55.19%
    Lost -56.0% -16.2% -61.1% -55.4% -55.0%
    Net 7.6% -3.2% -8.1% -1.9% 0.01%
    *Source:  Association of Fundraising Professionals Annual Fundraising Effectiveness Survey Report
  • The CEO’s new glasses (Lens of the Market)

    CEO Vision
    CEO Vision One of the most difficult tasks in leadership is pointing the ship and keeping it focused every day, remedy week, page month and year, upon reaching a critical destination. To review: Having a clear understanding the values and vision of the organization (V of VALCORT) is essential for creating trust and getting others to join in the quest. Without clarity of this, people can’t understand your direction, buy-in, and invest their own passion, time and energy in accomplishing the vision. Without clarity, its just a job for your employees and low engagement, lackluster energy results. Knowing the tools in your toolbox, or the assets you have to work with is fundamental (the A of VALCORT). If you don’t know what you have to work with, you’re constantly reinventing, overlapping, creating confusion in the organization as you begin to shift your focus outward. People are not able to use and leverage the advantage of previous investments. Your organization is stuck and ROI is low. Every CEO must translate their values, vision and marketing assets into meaningful customer value in the market. Does the CEO and 60/40 vision? Every CEO asks, “where do we focus? What resources do we invest in what activities? Where will we see the ROI we need to continue to grow?” My son recently decided to pursue a career flying for the Air Force. As a result, he needed to make sure his eyesight acuity was perfect and engaged the services of Chicago’s top eye surgeon to correct his vision and help him see with perfection. This is an absolute requirement of Air Force pilots as they need to be able to see their destination, and discern the threat of far objects quickly to maneuver around them. CEOs must have similar acuity of the market. They must be able to focus on the destination and see distractions, obstacles and threats far enough in advance to overcome them. This is where a lens of the Market (L of VALCORT) helps filter these inputs, provides clarity and focus, and creates a clear path to point the ship to the final destination. While the leadership of the organization can control the values, vision and build up of assets for going to market, they cannot control the market. It’s a crazy world out there. The market is filled with unpredictable, ever-changing, fickle customers. These customers are people who are driven by influences, pressures, and personal values that you don’t see and rarely can understand. And every organization has crafty and brilliant competitors who are working to capture more and more of your customers than you are. They’re trying to stay ahead of you, trying to out-smart, out-execute, out-deliver, and out perform you and your organization. The fundamental success of any organization pivots on their ability to know, create and manage their unique value to the market. If they have a unique position and a unique value, they can out-perform and out-grow their competitors day after day. They will attract customers and retain them. Their customers understand that no other organization can serve them like they can. Commoditization and selling based on price is replaced with loyal customers, high margin and selling to high value. How does a CEO gain this insight? A clear understanding of the Lens of the Market informs the CEO of the opportunity and the path for investment and focus. As the CEO sees the path, he or she begins to point the ship and navigate to the destination. The CEO then can bring all facets ( V and A- values, vision, assets and associations) of the organization into harmony, and, like the facets of a diamond, provide a unique, one of a kind, crystal clear value to the customer. But let’s face it, the sales team has their perspective, the marketing team has theirs, customer service team thinks they know, and operations is frustrated that the teams can’t get on the same page! Where is the truth in all of this? Unbiased, outside help is essential.
  • Assets (Marketing Assets)

    assets The core of growth is the ability to build and nurture trust.   The Four Stages of Trust is the blueprint to guide anyone into a high-trust relationship that creates change and fuels growth.  The Four Stages of Trust are:
    1. Shared Values
    2. Shared Vision
    3. Assumed Responsibility
    4. Always delivering on your promise
    In an organization, price we will assume for the moment that we have established shared values with a customer, and following that  we have moved on to discuss and define a shared vision (the V of VALCORT).  What responsibility to accomplish that vision, based on shared values, can the organization assume? Companies and organizations make a promise to customers and partners based upon their capacity and the products, services, processes and programs they have built.  In VALCORT terms, these are Assets -- marketing assets and associations. The A of VALCORT – Assets Marketing assets and associations are the tools in an organization’s toolbox that equips an organization to make a credible promise and then deliver on that promise.  If they can make a promise that has greater value than a competitor, they are likely to get the purchase.  VALCORT assets allow the organization to compete in their market. A great organization is constantly working to increase their marketing assets for strategic advantage.   They manage existing assets wisely and use them to influence, capture and manage their customer relationships.  They are constantly thinking about new assets to build, and often these show up as new “innovations.” VALCORT Marketing assets fall into two categories – tangible (fixed assets on a balance sheet) and intangible (processes, people, brands, brand associations). Tangible Assets Tangible assets include items like facilities, equipment, trucks, warehouses, products and inventory, computers and networks, software, archives as an example.  A growing and innovating organization continually audits the health and relevance of these tangible assets and uses them to create interest, build credibility, and establish competitive advantage and dominance if possible.  Intangible assets Intangible assets are those items that are not fixed property.  Intangible assets fall into two categories – 1) concrete and defined, and 2) perceptual assets or associations. These are assets generally “squishy” with the company having less control over how these assets are managed than fixed, tangible assets. They are difficult to manage and require a disciplined approach and constant care.  These intangible squishy assets, however, are where the real competitive and market power exists because they tap into a different part of the buyer’s brain that establishes meaning and value.  This is the center of decision making.  When you can lodge these intangible assets into a prospects mind, your are getting as marketers say, “share of mind.”  Concrete intangible assets Concrete intangible assets are entities that you can identify and know.  They are defined by the company and represent value to the customer.  You know them when you see them, you recognize them.   Concrete intangible assets include items like people that work or are affiliated with the company, services, plus brand marks, logos, colors and shapes, promotional campaigns and ads, even the profile of a typical customer group, to name a few. Examples are like the puffy doughboy affiliated with Pilsbury, or the Golden Arches of McDonalds.  They can be people affiliated with the company, like Steven Jobs with Apple, or Bill Gates with MicroSoft, Donald Trump with Trump Towers, or in the non-profit world, Chuck Colson with Prison Fellowship or Jesse Jackson with The Rainbow Coalition.  They can be services affiliated with the organization, like Google and its search engine technology or MasterCard offering services to charge a purchase today and pay it off later.  As marketers we can create them, use them, nurture and extend them to ensure that there is something attractive to the market about these intangible assets.  They can be defined, managed, controlled to some extent.  Perceptual intangible assets Intangible assets can also be perceptual or associations that customers have with the company or brand.  These perceptual ideas and thoughts are built up with every thought, mention, conversation, experience that the customer has with the brand.   This is the center of the purchase decision.  It is where feelings and emotions exist in the brain matter.  Scientists have discovered over the last 10 years that this area of the brain is largely the decision center.  In general, they have found that facts inform perceptions, but perceptions and emotions drive decisions.  If the impression and perception is negative due to a slow drive up window, or waiting on hold for 15 minutes while the a customer service rep gets back to you, or a faulty printer that just doesn’t seem to work right.  These perceptions build up and impact how people buy.   They can have meaning like old friends and family, or they can exude different personalities being adventurous. Managing these perceptions is tricky and both art and science.  If you’re going to build a home, you probably don’t want to feel that your builder takes unnecessary risks as he chooses the materials for your dream home.  On the other side, if you’re decorating the interior, you may want someone to help you that is innovative, adventurous, not someone that’s stodgy and stuck in a time warp 20 years ago. Managing these perceptions is tough work.  However, when an organization can have more touch points with a customer, and can control the experience, and the value that is delivered, they can be successful at “engineering” or creating a consistent customer experience to strengthen the perception of the brand. This is why organizations have raced to the internet and social media.  It is an inexpensive touch point that they can exert more control over the experience and conversation about the company, its brands, and how its perceived. Unfortunately, most social media and internet companies don’t understand this and sell delivery services to eyeballs.  In most cases, the companies do more damage to their customers perception and trust than help.  Communications are shallow and transactional. Building, nurturing, managing, delivering, and promoting assets are fundamental to building trust and fueling growth and innovation.  Knowing, creating and leveraging these marketing assets is a critical and essential VALCORT discipline.

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