March, 2008 -by Peter C. Brinckerhoff

This Month's topic: Generation Change and Finance

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Which is "The Best Nonprofit"?  Which nonprofit has the Best Mission Statement? Which Charity Fund Raising Event is best? You can see all of these lists, along with reviews at: Seekler.com. Seekler is a new method of finding and rating things you want, using the wisdom of large numbers of people: the core of Web 2.0. And, don't just read: participate....you can add your two cents by quickly building your own list, which is then added into the community listings and ratings. Check it out. Full Disclosure: Seekler is a product of Prethory, LLC, founded by my son Ben who also designed my www.missionbased.com website.

Websites of the Month

Here are my recommendations for websites of interest on this month's topic:  Generation Change and Finance:

www.aecf.org	Great monographs from the Annie E. Casey Foundation "UP NEXT" Series about Generational Change in nonprofits.
www.buildingmovement.org	Great information from the Building Movement project on Generation Change

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Generation Change and Finance
Straight from Generations:

"Money matters, even if we don’t want to admit it. Money matters differently to different people, and even differently to the same people in different situations  While we all may want to think that mission is the only thing for our organization, it’s really just the first thing, with the no money, no mission rule coming right behind. 

In looking at our four big impacts and financial implications, we have to keep in mind the different generational financial values and widely varied situations that generations are in, because there are differences. I am not going to argue that Boomers care less about money that GenXers, or vice versa, but it is a fact that many Boomers are caught in the financial vice of caring for elderly parents while putting children through college, and that hundreds of thousands of Gen@ young people come out of college and grad school with educational debt that’s several times greater than the cost of the first house my wife and I owned.

So money matters. Let’s look at how, in the context of our four big impacts: 

Boomers coming in the door

Accommodation. More than anything, a herd of aging boomers coming in the door, particularly as people to serve, requires accommodation. A lot of it. And accommodating costs money. Whether it is larger print options on marketing material, higher average lumens in your waiting areas (to accommodate older eyes) warmer offices to accommodate older workers who tend to get cold easily, or the traditional ADA type accommodations of ramps, bathrooms, etc. (which you all should have, but may need to expand), accommodation = $expenditure.

The boomers who are already on staff, or who are joining the staff as second career transfers, also are going to stretch your finances in terms of retirement needs, health care premiums, life insurance premiums.Again, the key here is focus and flexibility. We’ll talk about that more below as we look at your income and expense statement and your balance sheet.

Boomers going out the door

If you work for me, and you are 63 and I assume you are going out the door to retirement in two years, I’ll gauge my financial planning for salary, health insurance premiums, 401(k) contributions, and sick time accordingly. But if you surprise me and stay five years more, it can really throw my numbers out of whack. This is why I urged you earlier to talk, talk talk to your boomer employees early and often about their retirement.

The other issue with boomers going out the door and your finances is the potential of traditional donor boomers retiring and leaving your community….along with their regular donation. If you are a retirement mecca, more boomers are moving in than out, but for the rest of the world, this is an issue. And even if the boomers aren’t moving away, retirement always brings with it some financial re-evaluation. Retirees nearly always think through their priorities, and if your organization is not a top priority to them, you may fall off the list. 

Another concern in fund-raising related to retirement is the concomitant fall off in employer match dollars. Remember my story about the United Way fund drive at our organization? A small part of that story was that my firm was matching the donation (and targeting) of employee’s donations. This is not at all unusual, but when the employee leaves the employer, the stream of matching funds dry up as well.

Lots of financial implications for us to look at for the boomers, but what about GenX and Gen@?

Whatever happened to GenX and Gen@?

Where did the young people go? In terms of finances, they got buried under school debt. I mentioned this earlier, but it is such a huge social/financial change that it bears some focus. In our chapter on staff, I told you about my Kellogg students who want to work for nonprofits but can’t afford to since they have to pay their enormous debts off, and having a $70,000 school debt.

 What are the financial implications of this? First, if you have or intend to have a greater number of younger employees with higher ed backgrounds, you almost certainly will get some with school loans on their minds. This will, of course, impact their willingness to work for you and whatever salary you can offer, but if you engage them knowledgeably about the issue, and you (or your HR people) know some options for helping with loans, you may be able to show yourself as a sympathetic, concerned employer.

Unintended Consequences

A few months ago an exec of a human services organization walked up to me after I gave a speech in his community. He told me a story about a large local employer that had offered early retirement to many of its senior management. A large number of these executives had taken the offer. At the same time, the company in question had downsized a large number of its blue-collar workers, so there was a sharp rise in middle-age workers of all backgrounds looking around for something to do.

The exec and his agency had jumped in, hoping to find capable workers, interested in working part time, who could, in the words of the exec, “cost us less per FTE than other employees, with more productivity, because of their experience.”

Good thought. Didn’t work out so well, though. By the time the exec tried to accommodate all the different part time wants (flexibility of hours, some people wanting health care, some not, etc.), including consulting services to make sure he wasn’t violating labor law, and an extra part time HR person to handle the paperwork, he had discovered that he wasn’t saving any money. While the employees were experienced, they wouldn’t be around all the time. It wasn’t a good deal for the organization, or for the people they served. 

What about younger workers? You might think that by going younger in employment (my admonition to you in chapter 5) that you can save on salary and benefits. True, to a point, but if the younger salaried workers are not willing to work as many total hours, and you have to hire additional staff to get the work done, the savings could evaporate.

Such are the unintended financial consequences of generations. 

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If you found this hint helpful, there are lots more management, marketing, and technology ideas for you in the "Ideas" section at www.missionbased.com. Check them out--they're free.

And, remember to take a look at the Mission-Based Management Blog.

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My recommendations for texts and other readings on Generation Change and Finance:

Well, not to make too much of a point--there's an entire chapter on this topic in my book
Generations: The Challenge of A Lifetime for Your Nonprofit. Check it out.

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Generation Change and Finance...and  Technology

This relationship is a bit more arcane. How do we use technology to reduce the financial impacts of generation change. Certainly tech can make us more effective and we can track more financial trends and other metrics. But let's make sure we ask the right things, and track the right stuff.  And, as I look out on the nonprofit world, the key to recruitment and retention of workers, volunteers and staff is going to be flexibility in benefits. Budgeting for, tracking and managing flexible benefits is a perfect job for good software. Make sure your financial software can handle this task efficiently, and if not, go to resources like TechSoup to learn more and see what low-cost options they provide.

Another financial issue with generation change is boomers moving away---boomers who have given donations to you for 10 or 15 years. Good email and donor management packages can help you in this area, but remember--you have to ask for new email addresses (to say nothing of street addresses) BEFORE people move away. It might be a good idea to start thinking about that now.

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If you found this hint helpful, there are lots more management, marketing, and technology ideas for you in the "Ideas" section at www.missionbased.com. Check them out--they're free

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Below you'll see the date, location, and topics of public training I'm currently scheduled to do in the next few months. For more information on a particular speaking engagement, get in touch with the contact person listed in the right hand column, or email me.

For more information on my availability throughout the next 12-18 months, available topics, sample agendas, and fees go to www.missionbased.com/training.htm

4/1/08	Ft. Lauderdale	Generation Change	Community Foundation of Broward Carrie Turner cturner@cfbroward.org
4/8/08	Akron	Generation Change	Center for Nonprofit Excellence Susan Griffin griffin@cfnpe.org
4/10/08	Kohler, WI	Generation Change	Rehabilitation for Wisconsin Rebecca Hildebrandt Hildebrandt@RFW.ORG
4/15/08	Los Angeles	Generation Change; Recruitment and Retention	NISH Annual Conference Grant Harrison gharrison@nish.org
4/23/08	Ames, Iowa	Generation Change	Iowa Association of Community Providers Hank Hanson hhanson@iowaproviders.org
4/29/08	Kansas City, MO	Generation Change	Council on Philanthropy Michelle Davis executivedirector@kcphilnet.org

Generation Change, Finance and Marketing

One of the big financial impacts that are associated with generation change in nonprofits is trying to accommodate to microbranding in the larger society. I call this MeBranding, and it has impacts in donations, recruitment and retention, volunteering and, of course, service delivery

Straight from Generations:
"If MeBranding is the epidemic of choice that I believe it to be, ignoring it can cause a serious hit to your income stream, particularly if you serve a younger audience or client set. First, focus, focus, focus on your target markets, and then ask, ask, ask, to find out what people want. Finally, give them as many choices as possible. Ouch, says the CFO. Choices are expensive. OK, let’s rephrase. Give them as many choices as you can afford.

I suspect that for many organizations the costs of providing more options will outweigh the income increases. Your hope here is to just break even, and even that may have to be weighed over more than just one fiscal year."

So, if you are going to customize, remember my marketing mantra: ask, ask, ask, and then LISTEN. Don't assume you know what people want---ASK them!

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If you found this hint helpful, there are lots more management, marketing, and technology ideas for you in the "Ideas" section at www.missionbased.com. Check them out--they're free.

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Future Topics for
The Mission-Based Management Newsletter....

April	Greening Your Nonprofit
May	New Approaches to Social Entrepreneurship
June	Leadership Development
July	Technology Planning
August	Vision, Mission, Values
Send me your topic suggestions at: peter@missionbased.com

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You asked, so here they are: Past Single-Topic Issues of the Mission-Based Management Newsletter...

	2004	2005	2006	2007	2008
January	Business Development	Strategic Planning	Generation Change	Conflict of Interest	Reorganizing Your Board of Directors
February	Fund Raising	Leadership	Accountability	Generation Change and Your Staff	New Communications Tools
March	Volunteers	Core Competencies	Ethics and Management	Admin Costs
April	Financial Management	Expanding to New Markets	Staff Satisfaction	New  Tech Ideas for Nonprofits
May	On-line Marketing	Endowments	When Boards Cross the Management/Policy Line	Generations Change and the People You Serve
June	Transparency	Tech and Mission	Staff Rewards	Mentoring
July	Nonprofit Start-up	Sustainability	Saying No to Community Needs	Better Cash Planning
August	Governance	Ethical Benefits	Board and Non-CEO Relations	Small Nonprofits
September	Political Activities	Entrepreneurship	Executive Transition	Generation Change and Technology
October	Attracting and Retaining Younger Staff, Board, and Volunteers	Internal Communications	Advocacy	Crisis Management
November	Outcome Measurement	Board Recruitment	When Boards Fail	Generation Change and Marketing
December	Lifelong Learning	Better Budgeting	Conflict of Interest	Signs of Organizational Trouble