Tim's Library

Author’s Note: These short stories wind up a 12-part series exploring the lessons I’ve learned in building a foundation. I realized in writing these twelve articles that I’m not embarrassed by the mistakes I’ve made; perhaps I’m even proud of them. They have been my tuition for learning.

Story #1:

 

In the summer of 1997, I asked our parish priest Norm Smith how I could better serve. He asked me to come with him into the inner city to build services in a tough neighborhood using the campus of a semi-abandoned parish.

I told him I would do so because “the poor need us.”

He laughed and said, “Actually, I won’t allow you to go with me if that’s your attitude. We cannot serve well unless we serve each other.”

Norm felt that if you’re “giving” correctly, you receive as much or more in return. Too many people already “lord over the poor,” he said, which he felt was arrogant of the giver and disabling to the receiver.

Lesson:

People, rich and poor alike, don’t need our pity, they need our partnership.

John Wesley said, “It is possible to give without loving, but it is impossible to love without giving.”

And the risk of giving without loving is that by doing so we enable, never empower.

I’ve learned this lesson over and over. It’s tempting when you’re well-funded to “fix” things. But it is far more fulfilling to partner and learn together how to grow.

In all good service, dignity must be mutual.

Story #2:

 

After a few mission trips on our own, Alice and I took our three grown children to Kenya in 2008. Frankly, I never handled these trips well. It’s where I confirmed my strength was “serving those who serve” since I learned I’m incapable of serving the very poor directly.

One night we arrived at an orphanage far away from Nairobi, where we had seen unimaginable poverty. Out in the country, things seemed even worse to me. I slept briefly and fitfully in what were difficult conditions.

Just past dawn, I went for a walk to relieve my anxiety. Through a grove of trees, I saw my son Kevin sitting with a group of orphans. Kevin was sharing his guitar with them. It was quiet and the music was dreadful, but the scene is burned into my mind indelibly. Kevin was leading by calmly, lovingly sharing his passion.

A few days later, we sat at a bride rescue mission where young women are hidden from their fathers who wish to sell them to older men for marriage. In a remote pasture under an acacia tree, we listened to the teachers and young girls tell their stories. At the end, my 25-year-old daughter rose and said, “I have been so concerned with myself my whole life. Your story reminds me that I’ve been selfish. You’ve taught me things that I will carry with me my whole life. Thank you.”

The day we returned to Chicago, our son Tim organized a meeting for us to share our learning and make commitments to our individual journeys. We spoke of sharing our gifts and our spirit with these and other people.

Lesson:

Let the children lead.

Alice and I learned by watching our kids’ response to troubling matters and their responses reaffirmed our own commitments.

Story #3:

 

While working with many large non-profits, we came across a small group in Youngstown, Ohio, called the Beatitude House. Their mission is to house, feed and school homeless mothers and their children to get them back on track. Their leader, Sister Patricia, seemed to be a good person.

We’ve given them very little direct attention in the few years we’ve known them but we’ve often noticed how they have showed up to training we conduct and picked up on many suggestions we made, such as learning to write business plans and evaluating their revenue streams.

And with that little effort they claim we’ve helped them reshape their thinking and their organization.

Lesson:

Coachable people lead the most effective relationships.

To put it in a business context, I remember that in consulting I could never create great work with a lousy client. My great clients led me as much as I led them.

And so, we’ve learned that our number one filter for identifying partners is coach-ability. Who can take a little of what we have and turn it into a lot? And who can bless us with good learning while we are “teaching” them.

We’ve learned a lot from the Beatitude House.

I recently reviewed these last 12 articles on our foundation’s work and tried to come up with one theme. If there is one, it is this:

Whatever your ultimate goal may be, you will always find yourself in either a vicious or a virtuous cycle. The bad cycle is accepting defeat. The good one is accepting setbacks as tuition for the education; then moving on the wiser.

The end is never perfection. Our best hope is for progress.

And in that progress is the joy of the journey.

Peace,
Tim McCarthy

Author’s Note:  This is the first of the last two installments of my 12 month/article journey through “lessons from building a foundation”.  I promised last month that the last two articles of this series would be a compilation of short stories and lessons attached to each so, here goes:

Story

My once and still favorite charity began working with us in 2001.  They remain our symbol of both success and failure (ours, not theirs). 

Early on, we worked on issues as simple as “finding where their money was” by sending over my company’s bookkeeper every Friday afternoon.  Shortly after, we had our first marketing concept success with them – which I still use as an example of building revenue streams using what your organization already does well. 

Then, we made our first mistake by responding to a seasonal lag in revenue one summer by closing that gap with a large contribution.  Not surprisingly, the next three summers brought a similar request for funds and I “ponied up” each time to get them through the trouble.

Our final blunder came when we paid for a development person who didn’t work out. 

Lesson

We are functional when we are teaching bookkeeping or building marketing concepts. But we lose our effectiveness, to ourselves and to our partners, when we just cough up money.

Teaching and conceptual support leads to sustainability without us.

Coughing up dough leads to dependence – not independence.

Story

Just as my foundation got real money in 2007, the Catholic Church closed the parish we had been working at since 1997.  This parish in the inner city of Cleveland had long since lost its financial viability (I sang with about 50 parishioners on a good Sunday) but the early 1900 constructed buildings were sturdy.

God bless the diocese and some very hard working people who’d helped repurpose the buildings for everything from free health services (entirely volunteer staffed) for the aging to Head Start for their children and tutoring by some wonderful Ursuline nuns.  We even turned the old convent into three apartments for refugees from war-torn countries.

Once the parish was formally closed, though, the diocesan bureaucrats showed up with all the answers.  The good news – they’ve continued most of the services that were being provided.  The bad – they no longer needed us.  “We’ve been serving the poor for 2,000 years”, I was told as we were dismissed.

Lesson

Don’t get mad, get happy.  As long as the neighborhood was going to still be served, we had to get our egos out of the way (though it was not always easy).  And so we simply asked which services they didn’t want to continue and took those to another building in the same neighborhood.  There we nurtured those services for a couple more years, then blended them into other already existing service programs.

Story

So, with more money than we could spend in the inner city effectively, we did just what any serial entrepreneur like me would do: We came up with a dozen new ideas and built a staff and board organization (of great quality) to try to keep up with all my (please note the sarcasm) brilliance.

Due to the embarrassing nature of this story (to me), we will end it at that.  J

Lesson

Focus, focus, focus, focus……then if that’s not enough, focus some more.

No more than three major initiatives will ever be “on our plate” again.  And what few board and staff we still maintain support folks already doing service to the poor rather than serving ourselves.

Story

I am uncomfortable with awards.  Those who know me know that’s not due to lack of ego, it’s just I don’t find taking them to be consistent with our mission.

I’ve made a few exceptions when the organization convinced me we could advance their process by taking the award.  And so, I accepted one and used the event to kick off a fund raising campaign with $60,000 donated by me and a few friends of mine.

Three months later this group found out to their surprise and mine that they were not financially viable and were forced into a two year “sabbatical.”

Lesson

Trust but verify.  I had known and served these folks and their mission for several years but I’d never really bothered to do a complete review of their books and business model.

That will never happen again.

The common theme of these four, and the four stories and lessons I’ll share next month, is that I must always strive to “reach for the middle” when serving those who serve the poor.

I think a lot of people lose momentum by seeking perfection or “reaching for the stars” as they say.  And many others lose momentum through despair when confronted by the inevitable hurdles.  This is a one step forward, two steps back business, I have found, just like most others.

And so, we must take our lumps and keep our spirit – and try not to get to high or too low. 

Peace,

Tim McCarthy 

 

Author’s Note: This is the 10th in a series of 12 articles about the mistakes we’ve made building our foundation since 1997. I’ve decided the last two articles will be a specific timeline of who we’ve connected with and what we learned specifically in our primary growth years – 2007 to the present. I hope you enjoy these articles. Feel free to contact me at any time.

My friend, Tom Rudibaugh, wondered why “passion” wasn’t listed in last month’s article as one of the nine characteristics of great leaders.

Upon reflection, I guess it’s because I’ve watched passion drive as many good leaders to ruin as it has to success.

Passion is an emotion. As such, it must be managed carefully.

Unrestrained or misdirected passion can be more destructive than constructive. A recent example is former Ohio State University football coach, Jim Tressel.

The people I know who have worked directly with Tressel insist that he is a person of high integrity. His career was not only marked by the consistent success of his teams on the field but also by the relative success of his players and coaches as students and human beings.

When he was made aware in 2009 that some players had broken NCAA rules, he did not report these violations. He chose instead to confront his players directly while not passing on the information.

The result of his decision is that he is no longer coaching at OSU and in fact is banned from coaching NCAA football for five years.

Did he take on the issues privately because he felt he could guide the players to a better course without publicly damaging their lives, as he claims? Or did he keep the situation private so that he could gain another national championship?

In either case, he was blinded by his passion. Whether sincerely for his players’ benefit or unethically for the team’s success, Tressel compromised his integrity.

And a leader without integrity is a leader who ultimately fails.

My own passion for the success of this foundation and those we serve has caused me to make many bad decisions over the years. In the early years, we didn’t have enough money to make too many stupid mistakes. We quietly identified and supported a few humble leaders who served the poor well.

But in 2007, when our resources expanded, my passion got ahead of my rational brain.

The years 2008 and 2009 were characterized by enabling many organizations, some with six-figure gifts. I was the bleeding heart who finally could “make a difference.” And yet I found success is no more rapid in foundation work than it was for me in business. And that took 19 hard years. This could take more.

Passion drove me to go too far, too fast in those first years. One such case was accepting an award and kicking off a big campaign for a micro-lender in 2009 only to find within six months that the organization was essentially bankrupt.

So, since 2010, we have planned empirically. That is, we now invest in small increments, piloting each program until we and our partners are on the same page. We filter through a process that leads to big investments only if we succeed in small ways first. The result will be fewer crimes of passion.

Failure – which we all must experience – is a great teacher. 

When I was fifteen, I had a blind passion for rock and roll music. My garage rock band was everything to me. After a massive blunder, my band threw me out. It was my first experience with depression. 

After a few days watching me mope around the house, my Mom, who had no gift for crafts, made a decoupage of the following quote and gave it to me. Forty-five years later, I still keep it close to me as a reminder that – successful or not – I must be careful to pursue my passions thoughtfully.

I sincerely wish you will have the experience of thinking up a new idea, planning it, organizing it, and following it to completion and having it be magnificently successful. I also hope you'll go through the same process and have something "bomb out." 

I wish you could know how it feels "to run" with all your heart and lose - horribly. 

I wish that you could achieve some great good for mankind, but have nobody know about it except you. 

I wish you could find something so worthwhile that you deem it worthy of investing your life. 

I hope you become frustrated and challenged enough to begin to push back the very barriers of your own personal limitations. 

I hope you make a stupid, unethical mistake and get caught red-handed and are big enough to say those magic words "I was wrong." 

I hope you give so much of yourself that some days you wonder if it is worth it all. 

I wish for you a magnificent obsession that will give you a reason for living and purpose and direction in life. 

I wish for you the worst kind of criticism for everything you do, because that makes you fight to achieve beyond what you normally would. 

I wish for you the experience of leadership.  --- Earl Reum 

I wish for you passion that includes acceptance of failure…and the experience of leadership.

Peace,

Tim McCarthy

This is the 9^th in a series of 12 articles about mistakes I’ve made and lessons I’ve learned building a non-profit foundation since 1997.

Leadership is the most written about subject in business.  I’ve read twenty or more books on it, attended dozens of classes and seminars and read hundreds of articles.

And it’s still not easy for me to put a finger on leadership.

Of all the books, I still recommend “On Becoming a Leader,” by Warren Bennis, written more than twenty years ago.  For classes, I score Collins “Level 5 Leadership” above all others.  And you can find several of my favorite leadership articles in the library on this website.

Lately, I’ve been trying to add my own empirical data to the learning.  Who has led me?  What characteristics did they demonstrate?  What made me want to invest my time and resources in their organizations?

I still think of myself as 40, not 60, so it still surprises me when I realize I have a lot of data to work from:

·         Our foundation has invested in over 100 organizations so far

·         Our non-profit and for-profit lending companies have served over 30 small and large organizations

·         For 17 years I’ve met for a full day each month with 15 other CEO/owners in a peer group called Vistage (formerly TEC).

My summary view is that every business and non-profit can easily trace its success or failure in some manner to leadership.  Effective organizations are people-motivated and aligned by a good leader.

So below, I’ll list the characteristics I’ve most consistently seen in the successful entrepreneurs, CEOs and non-profit organization leaders who I’ve worked with.

1.      Acquisitive…..good leaders I’ve worked with crave learning and strive to acquire more knowledge.   The most effective acquisitive leaders get most of their learning from others who have faced similar situations and issues.  So, great leaders are not necessarily inventors, yet always they are builders of knowledge.

2.      Risk managers…..not risk takers.  The best leaders measure risk and reward dispassionately.  They calculate the “best case-worst case” before acting.  Prominent in their calculation is each decision’s effect on the people they lead.

3.      Realistic……..a consistent leadership vacuum is the avoidance of reality.  All of us face one or more overwhelming issues.  Poor leaders avoid seemingly insurmountable issues.  Good leaders accept them, face them down and try to pull that issue apart piece by piece.  Whether successful in overcoming them or not, these folks are more fun to follow.

4.      Planners…….my first question of anyone we might work with is: “Do you have a written plan?”  The second question is “May I see it and critique it?”  Poor leaders answer “no” to one of these questions.  Good leaders have a clear, written plan.  Great leaders have an open plan, welcoming all who are willing to help make the plan better.  NOTE: Many poor leaders hide behind a voluminous “strategic plan,” knowing that if they can’t fully understand it, no one else will either.  J

5.      Customer focused………..the most consistent quality of a poor leader is one who focuses internally.  “Dilbert” and TV’s “Office” demonstrate my point – strategy makes little sense.  Any organization that focuses, even benevolently, from the inside out do worse than ones who build from outside, in.  All success – profit and non – begins with a customer.  

6.      Numbers driven……the most effective non-profit leaders know that they cannot create, maintain or grow their mission without making the numbers work.  I majored in political science so by definition I hate numbers.  But I’ve learned the hard way that both my social venture and business interests can only be served effectively if I first measure decisions mathematically.

7.      Humble…..the surprise of Collins’ Level 5 leadership theory.  Humble people make the best leaders because we find them easy to follow.  Humble leaders don’t care who gets the credit (in fact they know success has many parents) and so they find it easy to encourage others.  Therein lies their power.

8.      Resourceful………….whether working with plentiful resource or none, great leaders know how to leverage whatever they have.  When it’s a lot, they use what they have wisely.  When little is available, they get resourceful.  The great start-ups I’ve worked with take the approach of “who can we borrow resources from?”

9.      Authentic………..I save this for last because it’s the final litmus test of great leadership, in my view.  It’s been said that “people with great strengths have great weaknesses.”  Authentic leaders recognize their weaknesses as well as their strengths.  They allow people to see both and can openly discuss them.  Who follows a phony?  Other phonies. 

Is there one leader I work with who encompasses all these qualities?  Yes, actually there is more than one.  Maybe I’ll feature them in later articles.  These articles would lend reality for my points by citing real leaders I know and follow.

“Do-gooders” fool themselves just like all business people do.  And those willing to fool themselves and others, consciously or unconsciously, waste time and money.    

How do I know?

I’ve done it – repeatedly.

It was only after I got a headache that I stopped beating my head against the wall of non-leadership.

Peace. 

Tim McCarthy

Author’s Note: This is the 7th in a series of 12 articles I’m writing on mistakes and learning in building our foundation since 1997.

Last month, I wrote about the foundation’s mistakes in enabling the charities we supported in our fledgling years. Called “Roots and Wings” I described how we shifted from investing increasingly more each year into our non-profit partners to a strategy of “moving in, and moving out” over a five year period.

This month, as a follow up, it seems appropriate to speak of how we have learned to measure impact.

In a word: Leverage.

In our early efforts, we measured our impact on the organizations we served by keeping track of the amount of money and time we put in. Our intent was to build the organization’s staffing and financial commitments.

Simply put, building an organization is no measure. Instead of adding impact, we added people and grants. Our early days were focused on operations. In 2009, we decided to target the ratio of operations-to-grants and found, dollar for dollar, we invested almost 2:1 in administration versus grants!

So we decided to target a 1:1 ratio for our ops/grants ratio and today, only two years later, we’ve achieved our first milestone. In 2012 we plan to continue our progress with a 1:2 ratio. The chart below summarizes the point:

Leverage to me means “return on investment.” In the case of measuring ops money over grant money, it was fairly easy. We no longer have lots of people and office space to make grants.

Our next task is tougher. In fact, the two most difficult words in social change are “impact and scale.”

Ultimately we’d like to see leverage of $5 returned for each $1 we invest. Although it will never be fully scientific, we believe it to be a noble goal. And while we’re just getting started on our overall measurement system, Revenue University provides a good example of what we’re after now.

Revenue U. is a pilot with a few partners we are starting in the first quarter of 2012. BVU: The Center for Nonprofit Excellence and Nancy Osgood of The Osgood Group have attracted 11 major organizations who serve the poor of Northeast Ohio to take a three month course in building revenue streams. Identifying and building revenue streams is work we've done consistently over the years since it's a universally needed element to building and maintaining a great mission. But we have only been able to do this work one organization at a time.

Enter RevU@BVU.

Here’s how it works:

1. Organizations will take a retrospective look at their own revenue mix.

2. They will learn how to develop ideas that leverage their organization’s assets.

3. They will create a customized set of evaluation criteria to determine which revenue stream best serves their organization’s mission and financial needs.

4. Organizations will leave with a set of next steps toward monetizing their idea.

So, now 11 organizations will receive in three months what usually takes us even longer to provide just one organization.

That’s leverage. And here’s the kicker.

We intend to enlist the graduates in a network where they will report quarterly on progress and plans in the programs developed so they can continue to build more revenue over time. Perhaps this will someday build into a network of organizations who serve the poor who can count on ongoing revenue building training.

It would certainly be easier to just review proposals and donate money, as most foundations do.

But in our foundation, we are seeking impact and change through leverage and scale.

Therefore, we’re learning that “you can’t change what you can’t measure.”

Peace,

Tim McCarthy

Author’s note: This is the sixth article in a series of 12 describing mistakes I’ve made in building a foundation.  My hope is that they are helpful to you in your own philanthropic efforts.

Roots and Wings. My Mom loved this phrase and used it to encourage my brothers and sisters about how we raised our children.  She asked that we give them each roots of our example and teaching while being careful to also give them wings when it came time for them to fly.

This thought came back to me when considering how to describe a major mistake our foundation made as we learned to “serve those who serve the poor.”  And since our manner of service is to engage, rather than to just provide money, we soon realized the nonprofits we assist became like our children: easy to fall in love with and enable, but difficult to empower. More...

One of my favorite cousins, Mike Murphy, teases bartenders by saying “I’m searching for the second best martini in America.”

When they take the bait, they ask, “Why the second best; why not ask for the best?”

To which he responds, “Because if I find the best, then my search is over.  What fun is that?”

If you’ve read this column before, you know how much I value planning.

My ad agency mentor Jim Johnson taught me that “if you don’t know where you’re going, any road will get you there” early on so carefully researched written plans precede any venture.   And I continue to stress the case for written planning with every organization I work with.

Without a plan, you’ve no basis to allocate your resources and no way to measure your progress.

But I’ve learned there is a higher platform than planning.  Let’s call it “searching.”

Our foundation has worked with great planners and great doers these last fourteen years.  The “best of the best” are searchers.

William Easterly’s seminal book, “The White Man’s Burden” (reviewed February, 2009) led me to appreciate this term. More...

 

A lyric in one of my favorite Avett Brothers songs (featured in Tim’s Library – Songs - April, 2010) states:

                  "When you run, make sure you run, to something not away from”

It’s a lesson I’ve had to remember many times in my life.

The first that I recall was quitting cigarettes.  Like most smokers, I’d quit several times unsuccessfully.  But this time I convinced myself that instead of “stopping”, I would start running which I’d done as a kid.  The result was simple – every time I ran, it made it harder to think about smoking again. 

And I had a positive goal; first 500 yards, a week or two later a mile, until over a year or so I’d ramped up to 2-4 miles every other day which I did for 23 years.  (My knees gave out, now I bike.)

“Run to – not away from” has come up again over these last four years as we’ve continued to build The Business of Good to a more scalable level. 

In 2007, our foundation had been around and helpful in serving those who serve the poor but we suddenly had more money to invest in our mission.

My first thought was to build a non-profit business center – bricks and mortar; a place where non-profits who served the poor could pay reduced rent and enjoy shared services to decrease their operating expenses. 

As is my custom from a career in marketing, we first did the research and found this idea has been done many times around the country.  In fact, there is a national non-profit business center network started by the famous Tides Foundation in San Francisco. 

So for more than a year, we met with interested non-profits and developed strategic plans, drawings…..we even hired full time people and bid on a building to rehab.  Eighteen months into our work, we’d spent tens of thousands of dollars.  In the end we found that “serving those who serve the poor” was More...

Author’s Note:  This is the 4^th in a series of 12 articles meant to share my trials and my errors in starting up and building The Business of Good.  They are intended to help anyone who pursues a noble cause.

The three greatest lies are:

1.     I’m a people person.  No, really, I am.

2.     I’ll do anything it takes to start my own business, and

3.     I’m dedicated to serving others.

The first time Lie #1 mattered was when I started to hire people.  I learned to ask a follow up question to those who said they were a people person.

I learned to say, “Good, we need people-persons here.  What’s the funniest thing that ever happened to you?”  Of course, few applicants could think of anything funny to say and some didn’t say anything. 

Why did I test for humor?  Since most problems are people-related, I’ve seen humor come in pretty handy in solving them, especially during times of stress.

One time a woman said, “Well, my Mom still doesn’t think this is funny but one day she was giving me a hard time when we were riding in the car and when we stopped at a red light, I fell over into her lap and laid my hand on the horn.  She pulled my hair, tried to pry my hand off the horn but couldn’t do a thing.  Everyone at the intersection was mad since it appeared my Mom was honking at them for no reason.” More...

Authors Note:  This is the third in a series of 12 articles I’m writing to share my experience, often “what not to do”, from building our foundation over the last 14 years.

About two years after selling my for-profit business and turning my primary focus to serving those who serve the poor through this foundation, I was a nervous wreck.  Daily I wrestled with the complex organization I’d created using my winnings from business. 

One day my financial manager looked at me and said, “Wasn’t this supposed to be fun?”

Now and then I take our work very seriously.  But his question made me realize I’d forgotten a very important lesson I’d learned in business.  That is, that any work can be accomplished more effectively and more joyfully as More...