We’ve been writing for a while about RIGHT NOW being the time to get back on board with best practices for employee retention. Today’s edition of Talent Management, the flagship HR resource, picks up the torch in their lead story: The economic upturn is driving new job opportunities, but low levels of employee trust and engagement, even lower levels of entry-level recruitment, and increasing demand for executive talent have created a crossroads. Companies must rethink their talent management strategies if they hope to retain key talent and remain competitive in today’s marketplace. Why the “sudden” emphasis on employee retention techniques? Well, it’s really not so sudden. A retention crisis has been brewing for some time, for a few reasons: Perceptions of job scarcity have kept unsatisfied employees from leaving. Businesses have slashed employee benefit packages in a fire-sale approach to cost cutting, leaving otherwise happy employees anxious, unhappy, and far less loyal. Economic realities have made top talent even more valuable, not less valuable, as businesses posture to gain market share and seize new opportunity. Businesses have all but abandoned their employee retention plans, relying on high unemployment rates to keep talent on their team. Artificially low turnover numbers have lulled human resources employee benefits folks into a false sense of security. It doesn’t feel like a crisis now, so nobody’s doing much about employee retention. But turnover costs are among the highest expenses businesses face, and employee turnover is postured to return with a vengeance. In fact, there’s a school of thought that business’ lack of focus on employee retention plans will actually delay the economic recovery, as the enormous burden of replacing talent – costing up to three times as much as the position’s annual salary and benefits expense – comes home to roost. OK, so if it’s not already a problem, it’s about to become a nightmare. Where do you start? Employee benefits. 20% of workers surveyed reported that employee benefit packages matter most in their retention decision. Do five things: Prepare to spend some money on your employee benefit package. You can spend a little now, or you can spend gobs of cash in a few months. It’s an easy choice. Establish solid employee health and wellness programs. If your staff doesn’t like your employee wellness programs, they’re four times more likely to leave your company for a better offer. Ask your employees what employee benefit package options appeal to them. Then be prepared to implement as many of the most popular options as possible. Many won’t cost much money – telecommute options, flex time, etc are virtually free. Think out of the box. Implement a wellness travel benefit, such as Vacation Wellness™. Do something to differentiate your employee wellness benefit programs from your competition. Be careful before you offer a raise. While salary increases can be effective employee retention techniques, if your business isn’t in a position to offer a meaningful salary increase, the offer could actually accelerate your employees’ departure. If you’re cash-strapped, you’re far better off improving your employee benefit package due to the power of perceived value. Is a crisis looming? Probably. Is there still time to avert it? Maybe. But only if you begin ... Read More

If you’re in the market for employee health wellness programs – and who isn’t, after the passage of the recent healthcare bill – it’s important to maximize return on your investment while the economic recovery picks up steam. It’s difficult to separate the wheat from the chaff. Many employee wellness benefit programs sound appealing, touting physiological screening for likelihood of disability, behavior modification, and diet and exercise as cornerstones, but there are two key questions to ask: How much will I have to bribe my employees to participate? Will this employee wellness program target the highest costs? The answer to both may surprise you. Human nature is working against traditional employee health and wellness program efficacy: Only 4% of smokers participate in cessation programs. Just 5% of obese employees participate in weight management programs. Fewer than 10% of chronic disease sufferers participate in programs designed to alleviate their symptoms. And traditional wellness programs don’t target the highest-cost employee maladies: stress and depression. Depression is six times costlier than obesity. Stress is nearly five times as costly as smoking. Traditional employee health and wellness programs largely shoot for the wrong target. And miss. So it’s time to go non-traditional. Get out of the wellness rut. Do something that’s designed to alleviate stress and prevent depression. Embrace wellness travel. Implement Vacation Wellness. Incorporate it into your work culture. Vacations are good for productivity. Vacations reduce stress. Vacationers are two to three times less likely to suffer from depression. Vacationers stay at their jobs longer. Vacationers suffer up to 53% fewer heart attacks. Vacationers live longer. So think outside of the wellness box. In fact, think outside of the country. Get your employees’ toes in the sand, or get them on a wellness vacation. We’re confident you won’t have to bribe them to participate in your Vacation Wellness employee benefit ... Read More

The relationship between effective employee benefit packages and employee retention is clearly defined: it’s nearly impossible to improve the latter without paying for the former. If your workforce doesn’t like your employee wellness benefit program, they’re four times more likely to leave your company for greener pastures. While most execs aren’t thinking much about employee retention at the moment, they should be. Two out of three employees are quietly job hunting right now, according to a recent salary.com survey. There’s a staggering financial impact associated with having ineffective employee retention plans. The average 100-employee professional firm burns between $3M and $4.5M on turnover costs every year. On average, an $80,000/yr salaried employee costs $240,000 to replace – costs that arise from job advertising, interviewing, vetting, onboarding, training, and periods of low productivity while the new employee learns the ropes. This turnover cost cycle occurs every 2.4 years, on average. The potential turnover cost savings are on an equal scale. Convincing one $75,000/yr employee to remain on staff for ten years can save over $675,000 in turnover costs. Reducing turnover by just 20% can save the average IT firm over $875,000 every year. Finding employee retention techniques that keep just one more $90,000 per-year salaried employee on staff this year will save over a quarter of a million dollars. So how do you implement best practices for employee retention without breaking the bank? It’s not that difficult to do, but your human resources employee benefits folks have to put in a little sweat equity, and the executive suite has to invest a bit of money, to realize the savings. Your employee wellness benefit programs have to be well thought-out, valuable, perceived positively, and given far more than just lip service. The key is to leverage the power of perceived value in your employee benefit package. Wellness travel in general, and Vacation Wellness in particular, provide an inexpensive and extremely high-return employee retention tool because of their high perceived value. Employees have literally jumped up and down with excitement at Vacation Wellness rollouts – certainly a compelling phenomenon when you’re considering how to bolster your employee retention plans. You have a lot of choices among employee retention wellness programs. Wellness vacation programs, and wellness travel in general, are highly lucrative, low-cost additions to your employee benefit ... Read More

Employee healthcare costs are up 12% per year over the past five years, and are expected to double in the next six years. Nobody believes that the new healthcare bill will do anything but accelerate those expense increases. Few debate that the smart money is on reducing healthcare expenses on the demand side, leading to a predictable – and overdue – increase in employee health and wellness programs. But not all employee wellness programs are created equal, and most target the low end of the employee healthcare cost spectrum. Obesity, hypertension, smoking, and sedentary lifestyle habits add 21% or less to your healthcare cost burden. Stress adds 46%. Depression adds 70% When they’re present together, stress and depression add up to 147% more cost to your average healthy employee’s healthcare coverage and care expenditure. And if you’re like the average employer, you’re already paying $13,000 per employee per year – for healthy employees! Depression and stress together could bring that total closer to $30,000 per year. Those are compelling cost figures – you’re undoubtedly considering a wide array of employee benefits related to health/wellness, and likely have a stack of employee wellness program ideas ready to consider for the short list. Add one more program: wellness vacations. This program is different than most employee wellness benefit programs. It doesn’t involve pleading, begging, or bribing your employees to engage in activities they’d rather avoid. You’re not required to swim against the inexorable current of human nature to achieve your cost reduction and productivity enhancement goals. The wellness travel concept leverages the strong correlation between destination vacations and positive health outcomes: Male vacationers are 32% less likely to suffer a heart attack. Female employees who vacation regularly are 53% less likely to suffer a heart attack. Regular vacationers are up to 3 times less likely to develop depression than their non-vacationing peers. Vacations reduce tension, lower adverse stress hormones, provide distance for effective coping, and reconnect employees with their families. Employees who take regular destination vacations report greater job satisfaction, and are less likely to leave your company. Vacation Wellness travel comes in all shapes and sizes: Employees can choose a gourmet wellness vacation experience, sampling famous cuisine from exotic regions. Ecotourism provides opportunities for staff to make a difference while getting away from the daily grind. Employees may also choose a budget wellness vacation, with a slightly less exotic destination or slightly shorter stay, to reap most of the positive health and productivity benefits of vacationing. Fortunately, the Vacation Wellness employee benefit package brings even the most exotic trips within most employees’ financial reach. Take a wellness vacation that focuses on physical and mental health. Just getting away is terrific, but your staff can go the extra wellness mile and elect to enjoy massages, exercise, practice yoga or meditation, and re-center physically and emotionally. Employee health and wellness programs don’t have to be painful. In fact, the broccoli, blood draws, and bribery model is on its way out – it just doesn’t work as well as it should. Consider a more elegant and cost-effective approach: wellness ... Read More

Why should you spend any time revamping your employee retention techniques now, in this economy? Aren’t employees just happy they have a job? Not really. Let me illustrate: Once, there was a man who lived in a small town, and drove a great distance every day to his work in a different town. The road was bumpy, narrow, steep, and riddled with potholes. Yet every day, the man drove his old car many miles to work. And his car broke down frequently, so he spent a great deal of money on repairs over the years, but he didn’t believe he could quite afford a newer, more reliable car. So over and over he drove. And the potholes would jar loose suspension parts, the steep hills would strain the engine, and over and over again his car would break down, requiring costly repairs. One day, the worst happened: his boss told him that due to difficult economic times, he would have to accept a reduction in his wages. He could no longer afford his car repairs. What was he to do? He couldn’t get to work, because he needed to repair his car. But he couldn’t miss work, because he would soon be fired from his job. How did he get in this situation? He didn’t think strategically. He should have invested in his transportation much earlier, before he reached a crisis point. Let me connect the dots. Your employees are like this man’s car. They’re tired, overworked, and in need of quality attention. You’ve asked a great deal of them, and the road has been difficult, steep, and bumpy. You’ve reduced their wages and benefits because you don’t feel you can afford them, but at the same time, you can’t afford to neglect your employees because they make money for your business. Your business relies on your employees to be smart, sharp, motivated, innovative, and loyal. You can’t afford to let them break down, or walk away, due to neglect. Voluntary employee turnover costs the average IT firm over $4M per year, and it costs three times an employee’s wages and benefits to replace her when she leaves. And the important paradox is that your talent is more valuable in a down economy than otherwise, not less. You need to work hard to keep your employees motivated and loyal. So businesses have a compelling reason to invest in their employee retention plans under all economic conditions. Here are five employee retention tips, drawn from various sources of best practices for employee retention: Take a hard look at your employee benefit package. Are you adding value? Have you asked your employees what they want? If you’ve asked for their input, have you delivered? Add low-cost, high-return extras, such as employee health and wellness programs, budget wellness vacation programs, flexible work schedules, and telecommute options. Start thinking like an economic buyer instead of a cash miser. You’re investing in the future of your workforce. Strategic workforce investment can have outlandishly positive results. Get educated on voluntary turnover’s enormous financial impact. Learn how to estimate your turnover costs, so that you can track your employee benefits retention performance over time, and maximize the return on your various employee retention plans and techniques. Understand that due to the incredible power of perceived value, your employee benefit package can have many times the retention power, dollar for dollar, as a salary raise. While all of that may sound like common sense, employee retention is no different than the man with the old, broken-down car: a little bit of attention and investment goes a long way toward avoiding a crisis situation. Now is the perfect time to readdress your strategic employee retention plan, before your workforce leaves in droves as the economy bounces ... Read More

Human resources employee benefits folks have a difficult problem at the moment: how to optimize employee benefit packages to take advantage of best practices for employee retention, maximize employee wellness benefit programs investment returns, and lower employment costs at the same time. The CFO isn’t asking for much, right? Happily, the problem isn’t as daunting as it might seem at first. But like all other things in life, you can rarely reap value without spending something in return. You’re going to have to spend a little bit of money on your employee benefit package in order to make a lot of money in return. So do it smartly. Invest in employee health and wellness programs. Healthcare costs are expected to double over the next six years, and there’s nobody around who thinks recent healthcare legislation will do anything but accelerate that expense increase. Saving a ton on healthcare requires spending a little money on effective employee wellness benefit programs. The good news is that the good ones have a high return on your investment. Invest in employee retention wellness programs. What is that? Quite simply, if your talent doesn’t like your employee benefits related to health/wellness, they are four times more likely to leave your company. And we’ve found that voluntary turnover already costs the average 100-person professional firm between $3M and $4.5M per year. Follow best practices for employee retention in your employee benefit plan. It’s relatively easy to figure out what’s important to your staff – you just have to ask – but you must be prepared to spend the money when they tell you what they want. Don’t be afraid to spend a little cash here. Convincing just one $80K/year employee to stay with you can save you over $240K in replacement costs. How much would you spend to save $240K? That $20K/year benefit doesn’t seem so costly in that light. Think nontraditionally. In lean times, businesses tighten belts and withdraw benefit offerings. You can easily stand out from competitors without spending much money at all. In fact, you should consider differentiating your firm’s employee benefit package from the competition’s offering as one of your primary employee retention techniques. Offer unique programs such as wellness vacation benefits, flexible work hours, telecommute options, and the like. Do your homework – be sure you’re getting the most mileage out of your employee benefit dollar. For example, most employee health and wellness programs focus on the low end of the cost spectrum, and ignore the costliest employee health problems: stress and depression. If you’re looking for employee wellness program ideas that tackle stress and depression directly, consider Vacation Wellness.™ It’s an easy, inexpensive, and powerful way to influence positive outcomes. Don’t be afraid to spend money to save it. While everyone else is huddled in fear waiting for more bad news, you can seize the opportunity to make your firm’s employee benefit package among the most competitive in your industry – for very little ... Read More

Life is gloriously circular. Lessons of childhood repeat. And teaching the lessons of childhood to our kids can be a tremendously powerful reminder of inexorable truths and insoluble tenets. To wit: picture a brow furrowed in fear, tears of worry and dread trickling down a sour visage, and quivering mouth forming those crippling words: “I can’t.” Endemic. Instant. Tragic. Who teaches us to imprison ourselves? It’s as if we’re programmed to sidestep disappointment by limiting our expectations. We fit ourselves into smaller and smaller spaces to avoid the pain of growth. “Yes, baby, you can. You can do…” I trail off in an expectant pause. “ANYTHING” comes the somewhat muted but visibly invigorated refrain. You can do anything. Our shared mantra. Mine and my four-year-old daughter’s. You can pick up the pieces. You can take back your life and your body. You can set off in an entirely different direction. You can live with purpose and confidence while you smile genuinely at the self-imprisoned hecklers lining your path. You can even learn to ride this bicycle without training wheels. If you just let yourself. If you choose courage. If you recognize that all the pressure is self-imposed, and that worry is always worse than the worst. And if you decide that failure is a necessary precursor to success, your ally in your quest for a better life, your chief educator, your best friend, your cheering companion on the road to the life you know you were designed to lead, it is possible to create a life that is drastically, unrecognizably different – better – than your life today. Something happens to us when we “grow up.” We lose connection with the people who push us, encourage us, exhort us, cajole us into getting beyond our fears. We lose contact with the support structure that teaches us to confront fear. And we stop confronting fear. So we stop growing. Worse, we become addicted to the path of least resistance, which keeps us subdued and sedated. We have invented entire systems whose sole purpose is to isolate and eliminate risks of all sorts. Unfortunately, risk is essential to reward. By grand design, the two are inextricably linked. Wellness and productivity are based on personal risk-taking. Confronting fear of failure, fear of criticism, fear of standing out, fear of being wrong, or worse, fear of being successful (crazy as it sounds, the last one plagues most of us) always precedes innovation, productivity, and positive life changes. So how do we return to that place where a loving hand and gentle voice encouraged us to bravely place both feet upon the pedals and set out training-wheel free? Here are five suggestions: 1. Find someone in your life who will push you. Don’t place your spouse or significant other in this position. There can be no politics involved. You’re asking for bare-knuckled honesty and patient but relentless engagement. 2. Find someone in your life who will journey with you toward your goals. If you have a fitness goal, find a workout partner or class. If you want to stop smoking, find a friend who’s doing the same. You’re accountable to each other, of course, but more importantly, you’re experiencing the ups and downs together. Misery needs company. IMPORTANT: this cannot be the same person you chose in #1. 3. Find an expert in the field of your chosen endeavor. Enlist their support. Ask for their advice and mentorship. Pay for it if it’s appropriate to do so. Life is difficult enough; you might as well find someone who has already blazed a trail in the direction you need to go, and learn from their experience. Don’t be afraid that you’ll lose out on the richness of the experience – the hills will be just as high for you. More importantly, you’re five times likelier to fail without expert advice. 4. Put your goal in writing. You’ve heard it dozens of times before, yet fewer than 5% of people ever write down a goal. As Yogi Berra says, “if you don’t know where you’re going, it’s awful tough to get there.” 5. Follow Churchill’s advice: “Never, ever, ever, ever quit.” Period. More important than what you gain by achievement is what you become through it. But any accomplishment of meaning will begin with a white-knuckled grip on the handlebars. What story will you tell ... Read More

There’s a growing group of smart wellness folks gathering in a new online community called the Employee Wellness Network. It’s where all the cool kids in wellness are hanging out. And we’re there too (snuck in while nobody was looking). There’s an interesting discussion unfolding around the topic of wellness program ROI. We’ve quoted wellness ROI studies and results in our white paper on healthcare cost reduction, and in various posts and pages around our site, but haven’t delved deeply into the statistical underpinnings of the studies and surveys we’ve cited. There are three good reasons for that. First, not many folks have funded wellness studies. Second, not many of them are peer-reviewed, rigorous, scientific studies. Many of the statistics available on the topic are survey-derived, without a great deal of academic rigor beneath them. We cite our sources, of course, but don’t lift the lid on all of the statistics. Third, and most importantly, it doesn’t really matter. If your CFO isn’t getting the wellness picture, you’re likely not going to win her over with ROI math. What follows is an excerpt of my contribution to the aforementioned wellness ROI discussion on tEWN (I mention that here because we have also listed Zoescent on the site as a wellness vendor, and I’m a big fan of full disclosure): There’s an unasked question, though: should we even be trying to nail down a number? Wellness stands more on the qualitative argument that holistic employee lifestyle improvement enhances productivity, reduces adverse healthcare cost trends, and creates a positive and attractive work environment (which speaks to recruitment and retention). Because it is but one part of a far more complex business whole, it’s difficult to nail down a return multiplier with any degree of precision, for all of the reasons above. However, just because there isn’t a tremendously reliable, scalable, and universally applicable formula for wellness ROI across a broad scope of wellness implementations and business climates does not mean that the argument for wellness lacks teeth or merit. [Regarding] publication bias, I think the phenomenon is endemic to studies of all kinds in all industries. Wellness is not unique in that regard. You can’t apply bias in methodology within the study and survive even a rudimentary peer review, but you sure can apply bias in what you choose to publish, a favorite trick of industry backers for ages. I think there are two takeaways. First, effectiveness depends entirely on execution. I’ve seen brilliant programs in myriad categories fail catastrophically due to poor implementation, leadership, or both. And even a modest program can work wonders when applied energetically, enthusiastically, and smartly. Second, when you make the wellness argument to numbers-oriented decision makers, I think it’s important to address the disparity in ROI. Mention that some companies achieve in the high 5’s while others barely return their outlay (again, the numbers really do depend on whom you believe). Then make the winning point that execution makes the difference between winning big or breaking even, which is precisely why your program is postured for success in your expert hands. Until we really can nail down a quantitative argument (an extremely difficult proposition), I think ROI has to be a supporting player in a more qualitative game. Most execs I’ve worked with recognize circumstances where trying to nail down the numbers is like eating soup with a fork, and can sense when a decision can be made by feel rather than by precise metrics. At the end of the day, unless your business utilizes commodity labor, the argument isn’t really whether a program that keeps employees at work rather than on sick leave, and producing more effectively while at work, and experiencing positive personal growth, is a sound business decision. Rather, the real argument is which suite of programs, which providers, and which methods are most effective. Is there enough available information to make a rock-solid qualitative argument for wellness? Absolutely. Is there also enough high-quality data available to demonstrate positive quantitative outcomes? Absolutely. That’s not the hard part. When’s the last time a car commercial spent time convincing us that automotive transportation was necessary or beneficial? It’s all about differentiation, niche, and functionality. And that’s where we need to take wellness as well. Not if, but when. Not whether, but which. There’s not really a profitable long-term alternative for businesses, particularly in light of exploding healthcare costs, and the fact that the majority of remaining domestic employment requires relatively high degrees of ingenuity, innovation, engagement, intelligence, and expertise. Personally, I think we’re right around the corner. As healthcare legislation realities start to come home to roost, wellness programs will seem much less like a leap of faith and much more like a business imperative. Which, ironically, will make the ROI math substantially ... Read More

When it comes to contrivances like securities derivatives and health insurance, “price is where supply meets demand” is an old Econ 101 truism that’s unfortunately untrue. Our healthcare system has systematically obfuscated what would otherwise be a relatively straightforward enterprise: caring for the health of our employees. Get sick. See a doctor. Get treatment. Get well. Easy. Except for the part between “Get sick” and “Get well.” We’ve created a complicated web of price variance that makes the details of “See a doctor” and “Get treatment” beyond problematic. Providers must price probabilistically based on the health insurance plan’s historical payout percentage and rate, irrespective of the numbers in bold on the policy. Buried in that process somewhere is the actual cost of service, but pricing becomes more an exercise in probability math than anything else: What’s the chance that the insurance company will pay their portion? When will they pay? How much wrangling will it take? We have an association with an air ambulance company. Ten percent of their full-time staff is comprised of lawyers with one job: get insurance companies to pay up. Layers of artificial complexity have one purpose: to hide true cost. Why has the healthcare profession taken that route? Because they sit opposite an entity whose business it is to minimize claims paid. Confusing the issue allows them to price creatively in order to stay on the black side of the ledger. I’m not disparaging the insurance industry – we run in the same circles, serve the same clients, and desire the same outcomes: healthy employees. But their business is to collect the maximum amount of insurance premium revenue, fund the minimum amount of care, and pay the minimum claim costs in the process. That’s how they pay bills and employees, and how they make profits. Many of them are also interested in keeping their clients healthy – preventatively, so they don’t get sick and file a claim. But we need to understand that insurance companies pay only to the extent required by law (mostly). Why? Because it’s business, not philanthropy. I’m also not disparaging the healthcare industry. There’s a reasonable expectation of remuneration for the lifelong education and dedication required of its workforce. There’s a real cost associated with developing and deploying cutting edge technology. And there’s a real cost associated with getting someone to pay you for the costs you’ve incurred. At the end of the day, the business objective in the healthcare field is to make as much money as possible providing care. Ying and Yang. So, opaque cost structure allows healthcare provider profit amidst the cat-and-mouse. And recalcitrant claims payment enables the insurance industry to keep some for a rainy day as well. And “keep some” they do, if a vociferous watchdog segment is to be believed. John Byrne reports that the top five health insurers earned 56% more profit in 2009 than in the previous year. Industry advocates are quick to point out that 2008 was the depth of a recession, but there are few industries with comparable bounce-back rates. Evil? Unethical? Good? Bad? None of the above. It’s the system we as a society have signed up for, and it’s the one we live with. But it won’t last, and my theory is that at the end of the day, its opacity will be its undoing. There’s another major American industry that’s a few years ahead of the healthcare industry on the life cycle curve. Investment banking built empires on contrived financial instruments with impenetrable definitions, and consequently manipulable value structures that left consumers holding the bag – twice (lost homes, plus bailout burden). It was a rapid slide to oblivion once the curtain was finally lifted. Tulip bulbs and pork bellies were far sounder investments than the inventions of the “responsible professionals.” Am I drawing a parallel between the current healthcare cost conundrum and the ruinous mass deception of the investment banking world? In a word, You’reDamnRightIAm. Any time you veil value in mystery, cloud cost with crap, and invent wildly complicated service structures designed to hide reality from the consumer, you’re heading for trouble. It’s just a matter of time. The fix? Easy. Pretend you’re grocery shopping. You make buying decisions based on bottom line economic disclosure made in good faith. You know what you’re getting, and for how much. Cost clarity allows educated choices. Value rises under its own power. Bad stuff rots on shelves. “But healthcare is more complicated than that.” I know it is. But I also know that it doesn’t need to be nearly as complicated as we’ve allowed it to become. Regardless of regulation, there is ultimately no alternative to transparent fees and prices for healthcare goods and services. We can begin now, and alter the outrageous trajectory of benefits and care fees, or we can wait for the meltdown. If we choose the latter, it’s doubtful that taxpayers will be quite as generous this time ... Read More

“Just like this, only better” isn’t really an improvement strategy. Some would call it insanity. Yet that’s the resounding message I took away from a recent charity fundraising summit in Phoenix. Charity demand is up 85% but funding is down 22%. That’s a 107% move in precisely the wrong direction. Unfortunately, fundraising efforts have been glacially slow to adapt. The conference was mostly nonprofit organizations, a smattering of businesses, and a series of discussions that ultimately ended at the same place: how to ask for donations more effectively. Times are tough. Say “pretty please” instead of just “please.” “The economy is beyond challenging, and we need to think differently about how we raise funds” was a typical breakout session opening remark. Sounds great. Maybe we’re going to hear some out-of-the-box fundraising partnership ideas. I’m listening. Unfortunately, panels, speakers, and participants would subsequently launch without fail into their rendition of how to add incremental efficiency or effectiveness improvements to the existing donation request paradigm. “There are too many charity golf tournaments in town. Here’s how to get your organization’s golf tournament noticed.” Or, “if donations are down at your annual event, here’s how to tweak your seating arrangements/invitation process/venue contract for better returns.” Or, “This city is saturated with charity solicitation mailers. Try mailings in different cities.” It was the same song, and very nearly the same verse. It’s no wonder that a common refrain went something like this: “We’d like to communicate more with our supporters, but it’s getting harder to get them to return our calls.” Really? Shocking. I left disheartened and disappointed. It’s nice to implement marginal efficiency gains, but only while we’re thinking of a better way to approach the problem altogether. We need a new way of thinking about charity fundraising, and I think it revolves around having something to offer your supporters in the business community – not another evening at a black tie event, or yet another round of golf, and not even the great feeling of benevolence gained by participating in a donation drive. Charities need to offer something of real business value. Here’s what I mean. For too long, the heart of the charity donation solicitation process has revolved around looking inward and describing the charity and its beneficiaries in as emotionally appealing a manner as possible, thereby enticing cash-laden businesses and local fat cats to take pity and donate liberally. It was effective, back when businesses were cash laden, and fat cats were actually fat. That time is not now. Sure, there are still some wealthy people who donate. But current economic realities have impacted private philanthropic donations as well. For their part, businesses are no less interested in helping charities today than three years ago. They’re just less capable of helping. Donations require discretionary cash. There’s not much floating around these days. It’s also important to understand that donations aren’t at their lowest during the year of the crash; they often decrease during the subsequent economic recovery as businesses retool and rehabilitate. So what do we do about it? Simple. Charities just need to position themselves as part of their donors’ business solution. Seek ways to add value. Seek ways to help donor businesses increase their business. Create win-win-win situations, where your beneficiaries win, their customers win, and you receive donations in the process. Stop looking at yourselves, and look closely at your business partners instead. Ask how your charity might help them create solutions, facilitate business, engage customers, etc. From that perspective, it’s relatively easy to identify how you can provide real value – without becoming a sales instrument or advocate yourself. “That sounds an awful lot like cause-related marketing.” I was hoping you would say that. It’s about time. Sure, not many charities can even spell CRM, and some actually prohibit it by charter. But the majority of charities shy away from raising funds through a cause-related marketing program largely because it would require doing something different than charities have traditionally done. That’s hard for human beings to do – until the condition driving the change gets painful enough. Are we there yet? I submit “yes.” Two weeks ago, I toured a one-of-a-kind, state-funded (sort of), inpatient child rehabilitation charity. It was absolutely squalid. During a suitably heart-tugging tour, the chief donation solicitor mentioned that they can’t afford socks and shoes for the children they serve. Windows were broken and boarded, plumbing was a mess with old water damage evident everywhere, and facilities were dilapidated and marginally habitable. If the fundraiser’s goal was to paint a picture of dire need, she succeeded in spades. And then, much to my dismay, came the same old, tired routine: open palm face up, put on sad face, wait until donor writes check. So very 2007. “Describe your fundraising efforts,” I asked. “We had a golf tournament last year that raised a few thousand.” And? “That’s about it. We rebranded all of our materials and website as well.” You’re kidding, right? “Times are tough.” You don’t say. I outlined our cause-related marketing program for her (Note – this isn’t a solicitation piece. We screen our charity affiliations very carefully). It clearly isn’t for everyone. Not every charity is a good fit for this kind of thing. But this particular charity, based on the details the business director discussed, looked like it could have been a good fit. Unfortunately, while the program has the potential to generate in a single month what this particular charity raised all of last year, it would have required a slight adjustment in the chief fundraising officer’s message to community business partners: “We have something of value for you in return.” You’d have thought I had one eye and two noses. I don’t mean to be too tough on the poor lady – she was clearly in over her head to begin with, and while it sounds cliche, change is frightening for all of us. But I think that’s the chief reason many charities are limping along, stuck in a paradigm that worked under a vastly different set of economic circumstances. They’re clearly struggling now that charity service demand is higher while business and government funds are less available. Despite the gloom, it isn’t all bad news – while relatively few have actually implemented meaningful change, at least more charities are talking about it. At the end of the day, one of two things will happen: good times will return, and the “pretty please” method will work once again, or, when the pain reaches an intolerable level, charities will finally adapt. But how much good could we be doing right now, in the time of greatest need in recent memory, if we could just wrap our minds around a slightly different approach? I’d love to find ... Read More