Sustainable Marketing Blog » Guest posts

ReVisioning Value 2010: Keynote sticks and stings

Peter Korchnak — Tue, 27 Apr 2010 20:31:26 +0000

On Monday, April 26th, 2010, I participated as member of the media team in the ReVisioning Value 2010 conference, organized by Springboard Innovation and Social Enterprises. This is the first of two resulting guest posts, coming up on the Springboard Innovation Blog.

I’ll share more about my experience at the conference in the next few days. In the meantime, read my take on social ventures, “Is social enterprise the ultimate sustainable organization?”

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If the role of a conference keynote speaker is to spark dialog, Dan Pallotta exceeded all expectations. In fact, his opening speech seemed to have left the most indelible mark on every participant I spoke with at ReVisioning Value 2010, both in form and in content.

For example, Jenna Ringelheim, of the Northwest Earth Institute and Bainbridge Graduate Institute, said, “I’ve worked in nonprofits for 10 years. [Dan Pallotta] made me rethink how I imagine nonprofits should operate, and how they can demonstrate their values by the actions they take.”

In “ReVisioning Change: Removing Barriers for Good”, Dan summarized his book “Uncharitable”, challenging everyone to give nonprofits the freedom to make as much difference as possible by allowing them to use the rulebook governing the market.

According to Dan, nonprofits experience discrimination in 5 areas:

Compensation - Nonprofits aren’t culturally and ethically allowed to pay competitive wages based on the value they produce, which drives talent and leadership away.
Marketing - Nonprofit can’t build demand with for support of their services with advertising the way businesses can.
Risk-taking – Nonprofits are forced to avoid failure at all cost and can’t freely try out innovative initiatives to generate revenue.
Investment – Nonprofit initiatives are driven by the need to generate short-term returns rather than grow revenues in the long run.
Profit – Unable to pursue profit, nonprofits are starved for growth and risk capital and can’t compete with business for investment.

In other words, we — donors, foundations, governments, media, as well as nonprofits themselves — should allow tax exempt organizations to operate more like businesses.

What irks Dan more than anything, however, is how we tend to evaluate nonprofits based on the percentage of donations going to the cause versus to overhead. Focusing on lowering overhead forces charities to forgo solving problems. It also gives donors bad information, failing to provide any feedback on the quality and effectiveness of service or on what difference the organization makes.

Dan’s argument against separating overhead from cause convinced many. Photographer Sara Gray, one of the event sponsors, said, “I’ve heard that information reported on the news. It sounded reasonable. But his presentation made me think, ‘Wait a minute, let’s step back, and evaluate it again.’”

Dan’s solution to all these problems: build a massive assessment apparatus, within a specialized institution perhaps, to measure program effectiveness.

Jenna Ringelheim reached a different conclusion: “We must get beyond numbers and figure out a way to better tell stories of nonprofits that are doing good. There has to be a balance between numbers and stories, but we have to be able to communicate what we do, how we make a difference, and how nonprofits’ work impacts lives, rather than just how dollars are spent.

All interviewees highlighted Dan’t engaging presentation style. All agreed with most of what he said, if only because it seems to have confirmed something they’ve long felt.

The most radical disagreement came from an unexpected corner. In reference to Dan’s call for salaries of charity CEOs to reach parity with those of business executives, Jefferson High School student Erica disagreed “with the idea that nonprofit leaders should be earning as much as businessmen just because it’s charity work.”

Rather than push nonprofit salaries upward, toward the levels of business, Erica argued for lowering all salaries. “Comparing $400,000 salaries with CEOs making millions is like littering on a small scale,” she said. “Just because you’re littering less than someone who’s littering a lot doesn’t make littering right.”

Dan’s keynote began with a case study suggesting nonprofit success comes from asking people to do not the least, but the most that they can do. Dan Pallotta had been tasked with getting the ReVisioning Value 2010 ball rolling; I predict the conference participants will recall his presentation as the event’s highlight.

The CSR measurement conundrum

Peter Korchnak — Wed, 31 Mar 2010 23:38:49 +0000

Guest post by Megan Strand. All views in the post are the authors’ alone.

Having said that, consider this post a teaser for a future series on measurement in sustainable marketing. Coming up in ~~April~~ May. Stay tuned!

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Attention recent MBA grads and pencil pushers, please consider yourself warned…you’re not going to like this post.*

Because you see, my faithful ROI chasers, you’re kind of missing the point of Corporate Social Responsibility (CSR) by demanding a “social impact” calculation before you’ll even glance in this direction.

Of course measurement is important

Of course I realize that capturing key metrics is important. I believe that, inherently, CSR efforts will lead to long-term impact in the bottom line. Just not the way you’re trying to prove that it will. And probably not as quickly as you’d like. CSR is typically a long-term investment, not a quick fix.

Here are a few of the challenges with measuring CSR efforts as I see it:

The Uncertainty Principle (or “frying the ant”)

As soon as you step in to push your measurement agenda, the spirit and passion that leads those efforts dies a little. In quantum physics (bear with me here), scientists discovered what is referred to as the Uncertainty Principle. In a nutshell, scientists discovered that the very act of measuring makes accurate measurement impossible.

How exactly do you measure intangible benefits like authenticity, good will, community investment, environmental mitigation and trust? Yet these are the very things that engender customer loyalty. Hold up the magnifying glass too closely and too often and you risk frying the ant. And let’s be honest…as a kid, did you really use a magnifying glass to examine the ant or send it out of this world in a blaze of spontaneous glory?

Not enough emphasis on future trends and risk analysis

In a recent blog post, Gil Friend discusses the consideration of risk. Friend advises, “Volatile times demand that companies ‘factor the future’ into these assessments, with explicit consideration of risk in the sustainability business case.” He points to unknowns such as energy availability and prices, changing regulations and financial crisis. Friend also mentions changing customer expectations, which is, I think, a biggie and one that savvy companies will keep an eye on. Recent surveys by Edelman, Cone and Burson-Marsteller clearly demonstrate that, if given a choice, customers will choose the company demonstrating socially responsible practices over one that does not.

Too many useless metrics

What you measure IS important. Again, calculating every metric known to man on your CSR programs is probably a huge waste of time. At the end of the day, what are the key metrics that demonstrably matter? Do you know? If you’re unsure as to whether it matters or not, think seriously about measuring it.

Ask yourself what it is you truly need to capture. Think long and hard. Measure it because it matters, not because fear and the status quo dictate that you should.

Megan Strand is a marketing/communications consultant carefully watching the emergence of authentic corporate social responsibility and cause marketing initiatives and currently blogging on strategic non-profit/business partnerships at InCouraged.com. Find Megan on Twitter and Facebook.

* Read an expanded version of this post.

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Image credits: whoswho and jovike