Social Currency

My friend Greg Baldwin, the Executive Director of VolunteerMatch, recently relayed a story he found amusing. I found it symptomatic of something that happens very often and isn’t usually helpful. First some background.

VolunteerMatch began in 1994 when four individuals conceived that the then-nascent internet might help people volunteer to do work they cared deeply about. For 17 years, this concept has been shepherded by the organization now known as VolunteerMatch. VM has been building towards the point where reliable revenues – those associated with their particular business model – cover the full cost of the enterprise. This business model combines fees from corporate users, fees from nonprofits who elect premium services, and a few individual donations. VM’s vision has been that these recurring revenue streams might sustain its platform without dependence on major grants, government earmarks, or other hard-to-predict funds.

To help achieve this goal, there have been two rounds of collective growth capital funding from philanthropy, each with the express desire of building and supporting VM while waiting for the revenue model to ramp up. NFF supported the second of those rounds with a formal SEGUE project (capital campaign to raise growth capital).

For over a decade, among a wide array of performance metrics, VM has remained focused on measuring what portion of their expenses are funded by business model revenue. They call this “% Sustainable” as a shorthand. In 2010, for the first time, they reach 100% sustainability by this measure. One might imagine clinking champagne glasses.

Greg’s amusing story was not of clinking flutes. Instead he relayed the story of their auditor’s comments on the 2010 financials. VM’s auditor advised them to increase focus on the fundraising business. Never mind that VM has invested blood, sweat, and tears to wean themselves from dependence on philanthropy, this well intentioned expert viewed VM through a lens seeking a “normalized” nonprofit economic story.

Often we are faced with people who express, or worse, imply, a goal that we have not embraced. Sometimes it is extremely helpful to hear how others think about important milestones. Other times, we are swayed by these influences to pursue or measure progress against goals we have not embraced, and which might not be appropriate.

One might as well ask Usain Bolt to work on his butterfly. If you want to be a triathlete, balance your disciplines. If you want to be a sprinter, less so.

The tale reminded me of a recent NBC Nightly News interview with a rebel in Benghazi. The individual questioned NATO’s commitment to defeating Qaddafi. At the time NATO was clear their goal was to impede attacks on civilians; they had not claimed a goal of defeating Qaddafi.

It also reminds me about questions of nonprofits’ overhead rates, growth rates, earned revenue, revenue diversification, bench depth, lives touched, and so on. While each of these is really important for some nonprofits, none are appropriate for all. That idea is easy to say, and most who give the topic two minutes of thought come to the same conclusion.

Somehow, even with this agreement, we are swayed by the influences of those around us. We have conversations with our team, or our funders, or our auditor, or any of the other myriad stakeholders. Often we give inordinate heed to experts, over the voices familiar with our own agendas. This is a risky proposition we would be well served to examine.

Perhaps a useful definition of visionary leadership is the ability to not be unduly swayed by the implied or expressed goals of those outside your own tent. I applaud those few who consistently are able to do so. For the rest of us, I suggest a conscious habit of examining and aligning around appropriate goals. The best defense against unhelpful influences is clarity around our own agenda.

What are the voices you hear? How do you decide which provide useful external perspective, and which are likely to lead you astray?