Ep 211: The Maverick Marketing Approach (with Seth Godin)

Summary

Episode Summary: Ep 211 – The Maverick Marketing Approach (with Seth Godin)

In Episode 211 of Nonprofits Are Messy, host Joan Garry engages in a thought-provoking conversation with renowned marketing guru Seth Godin. The episode delves deep into the intersections of marketing, innovation, and leadership within the nonprofit sector, offering invaluable insights for CEOs, board members, fundraisers, and nonprofit marketers striving to amplify their organizations' impact.

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Introduction: Setting the Stage for Innovation

Joan Garry kicks off the episode by sharing a series of impactful quotes that frame the discussion:

• "Everything that has ever happened in the nonprofit sector was once an innovation."
• "The nonprofit sector is trying to solve hard problems. It's worth failing. It's worth experimenting to find the key to the solution."

Garry emphasizes the importance of marketing in nonprofits, remarking, "Marketing is essential to the impact a nonprofit organization can have," and highlights a prevalent challenge: "nonprofit leaders are risk-averse."

She introduces Seth Godin, highlighting his extensive contributions to marketing and innovation, including his best-selling books like Linchpin, Tribes, The Dip, and Purple Cow. Godin’s commitment to the nonprofit sector is deeply ingrained, making him an ideal guest to explore unconventional marketing strategies.

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Understanding Marketing in the Nonprofit Context

Seth Godin begins by challenging traditional perceptions of marketing within nonprofits. He states, “marketing is the story you live by. Marketing is the choices you make” (05:29). Godin argues that many nonprofits misunderstand marketing, equating it with mere hype or promotional tactics. Instead, he posits that every interaction a nonprofit has—whether it’s how they treat clients or the sources from which they raise funds—is a marketing decision.

Garry probes further, noting that many nonprofit leaders find marketing “icky” or “yucky,” terms Godin confirms, saying, “They think marketing is hype and promo and shortcuts and spam and hustling people” (06:59). He redefines marketing as a holistic approach encompassing the organization's values, interactions, and the narratives they create.

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The Hidden Gem Myth and Donor Dynamics

Garry challenges the notion of nonprofits branding themselves as "hidden gems," questioning its effectiveness in attracting support. “If it's hidden, it's not a gem,” she asserts (08:13). Godin responds by illustrating that exclusivity can sometimes enhance desirability, much like a renowned restaurant with an unlisted phone number creates an allure of exclusivity (08:34).

However, he emphasizes the importance of aligning donor expectations with the organization’s goals. “If you decide to raise money from foundations, you made a marketing choice,” Godin explains (08:30), underscoring that nonprofits must be intentional about who they aim to attract and how they engage with different donor segments.

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Donor Retention vs. Acquisition: The Leaky Bucket

A critical point of discussion is the challenge nonprofits face in retaining donors. Garry introduces the metaphor of the "leaky bucket," where organizations can attract new donors but struggle to maintain those relationships. Godin elaborates on this by distinguishing between different types of donors:

• Emergency Donors: Those who give in response to immediate crises but may not return.
• Opportunity Seekers: Individuals who participate in events like charity auctions for personal gains, such as networking or status.
• Committed Donors: Those who donate consistently because they resonate deeply with the organization’s mission and story.

He asserts, “If you're not turning away donors, you are not serious about how you are marketing your organization” (23:37), emphasizing the need for nonprofits to curate their donor base thoughtfully.

Garry counters by advocating for nurturing relationships with all levels of donors, illustrating with an example from her time at GLAAD where a modest donor eventually contributed $3 million. She suggests that with proper stewardship, even smaller donors can evolve into significant supporters.

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Redefining Failure and Embracing Innovation

The conversation shifts to the cultural aversion to failure within nonprofits. Godin challenges this mindset, asserting, “If you are trying to solve a problem where the solution is not yet known or optimized, which means that you're a scientist” (30:04). He encourages nonprofits to adopt a scientific approach—embracing trial and error, documenting failures, and learning from them.

Garry shares her observations during the pandemic, noting how nonprofits had to innovate out of necessity, showcasing their inherent capacity for creativity and resilience. However, she expresses concern that this innovative spirit is waning, becoming replaced by risk aversion driven by boards focused solely on risk management rather than strategic growth.

Godin concurs, advocating for a system where nonprofits have both a Board of Directors focused on governance and risk management, and a Board of Advisors dedicated to innovation and strategic brainstorming. He advises, “A nonprofit should have both a board of directors and a board of advisors” (35:20), to balance oversight with creative freedom.

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Strategic Recommendations for Nonprofit Leaders

As the episode nears its conclusion, Godin offers three key pieces of advice for nonprofit leaders:

1. Appreciate Your Existing Efforts: “Thank you for showing up and doing the work. It's not appreciated enough and the work is super important,” Godin begins (41:44). He urges leaders to recognize that they are already engaging in marketing through their daily operations and interactions.

2. Clarify Your Service Purpose: “Who exactly are you being of service to? Who's it for? What's it for? What is the change you seek to make?” (42:00). Godin emphasizes the importance of nonprofits clearly defining their target audience and the transformational impact they aim to achieve for both donors and beneficiaries.

3. Understand and Leverage Systems: “Everything in our life is impacted by the systems around us, unseen or seen,” Godin advises (42:30). He encourages nonprofits to discern which systems are beneficial and how they can adapt or utilize them to further their missions effectively.

Garry reiterates the importance of embracing "messiness" as a fertile ground for innovation, challenging the stigma associated with it. She concludes by encouraging listeners to implement the episode's insights into their board meetings and organizational strategies.

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Closing Thoughts

Joan Garry wraps up the episode by urging listeners to revisit the conversation, share it with their boards, and integrate its lessons into their strategic planning. She underscores the necessity of marketing and innovation as pivotal tools for nonprofits aiming to address complex societal issues effectively.

Seth Godin leaves listeners with a powerful reminder:

“Showing up to do our job is insufficient. There are urgent problems that need to be addressed, chronic problems that need to be relieved. But we get to address those things when we be strategic about it, when we make difficult decisions in the short run to help us get the results we seek tomorrow.” (43:20)

This episode serves as a compelling guide for nonprofit leaders seeking to navigate the intricate landscape of marketing and innovation, advocating for a balanced approach that honors both stability and creative experimentation.

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Key Takeaways:

• Redefine Marketing: Beyond promotions, marketing encompasses every interaction and decision that shapes your organization’s narrative and mission.
• Strategic Donor Relationships: Focus on attracting and retaining donors whose values align with your mission, rather than indiscriminately increasing donor numbers.
• Embrace Failure: Foster a culture where failure is seen as a learning opportunity, driving continuous innovation and improvement.
• Balanced Governance: Implement dual board structures—one for governance and risk management, and another for strategic innovation and advisory.

For more insights and resources, visit Joan Garry’s website.

Transcript

[Joan Gary]

Here are three quotes. Quote 1. Everything that has ever happened in the nonprofit sector was once an innovation. Quote 2. The nonprofit sector is trying to solve hard problems. It's worth failing. It's worth experimenting to find the key to the solution. These are quotes from my guest today. Here are a couple more quotes. People equals power. A nonprofit that describes itself as as a hidden gem isn't actually a gem. Next quote Marketing is essential to the impact a non profit organization can have. And lastly, nonprofit leaders are risk averse. Those are quotes from me. It's my podcast. I get to include my own quotes. My guest today is the marketing goat, the champion of innovation. And his commitment to the non profit sector is actually part of his DNA, his family's DNA. Actually. He has put all of this together with all kinds of adventures to drive more fuel into the gas tank of the sector. We have a lot to talk about. I've done my homework and I've read more than a few pieces that he's written about fundraising, about marketing, about what makes an idea remarkable. Not sure I agree with everything, so it'll be fun to kick some of that around. I'm well above 200 episodes of this podcast and I remember seven years ago when we started. We talked about our aspirations for it. We brainstormed a list of guests we figured were kind of out of reach. My business partner and I came up with the same name at the same time. The name Today's guest, Seth Godin. Greetings and welcome to Nonprofits Are Messy. I'm your host, Joan Gary, founder of the Nonprofit Leadership Lab where we help smaller nonprofits thrive. I'm also a strategic advisor for executive directors and boards of larger nonprofits. I'm a frequent keynote speaker, a blogger, and an author on all things leadership and management. You can learn [e-mail] I think of myself as a woman with a mission to fuel the leadership of the nonprofit sector. My goal with each episode is to dig deep into an issue I know the nonprofit leaders are grappling with by finding just the right person to offer you advice and insights. Today is no exception. Seth Godin is The author of 20 books that have been bestsellers around the world. They've been translated into more than 35 languages. He's also the founder of the Alt MBA and the Akimbo Workshops, online seminars that have transformed the work of thousands of people. He writes about the post industrial Revolution, the way ideas spread, market marketing, quitting leadership, and most of all, just kind of changing everything. He's written a boatload of books, Linchpin Tribes, the Dip and Purple Cow. His book this is Marketing was an instant bestseller around the world. And his newest book, the Practice, came out at the end of 2020 and is already a bestseller. His newest project is leading a worldwide group of volunteers, creating the Carbon Almanac. In addition to his writing and speaking, he's founded several companies. I hope I pronounce them correctly, including Yo Yodyodyne and Squidoo. I just like saying that word. Squidoo.

[Seth Godin]

Exactly.

[Joan Gary]

His blog, which all you have to do is just like type Seth Godin into Google, is one of the most popular in the world. His podcast is in the top 1% of all podcasts worldwide, something I aspire to. And in 2018, he was inducted into the Marketing hall of Fame, which I wonder where that is, because halls of fames are always in the weirdest places. More than 20,000 people have taken the powerful Akimbo workshops he's founded, including the Alt MBA and the Marketing Seminar. Seth, thanks so much for being here today for sharing both your insights and your passion for the nonprofit sector with the board and staff leaders who are listening to us today.

[Seth Godin]

Well, thank you for doing this. Thank you for showing up on the regular, and shame on you for waiting 200 episodes to have me on. I'm thrilled, really delighted.

[Joan Gary]

So isn't it very true that halls of fame are in weird places?

[Seth Godin]

Oh, yeah. Like Canton, Ohio, or Springfield, Massachusetts. Absolutely. I don't think the Marketing hall of Fame has a building.

[Joan Gary]

Oh, it doesn't have a building?

[Seth Godin]

No.

[Joan Gary]

Oh, there's something to raise some money for Springfield, Massachusetts basketball. So Springfield, Massachusetts Basketball hall of Fame. Because I know it's on my way to my grandson's house. Canton, Ohio, is the Football hall of Fame.

[Seth Godin]

I think so, Yeah. I have. Yeah.

[Joan Gary]

Okay. What's in Cleveland?

[Seth Godin]

Rock and roll.

[Joan Gary]

Yeah. Okay.

[Seth Godin]

And Ted Williams. Just worth noting, before we start, Ted Williams is in the fly fishing hall of Fame.

[Joan Gary]

Is he?

[Seth Godin]

Yeah.

[Joan Gary]

So you should also know, and actually my listeners may not know, I am a die hard baseball fan and a collector of vintage baseball cards. Like I have Tom Seaver as a rookie and, you know, some of that sort of thing, so. And a diehard Yankee fan. So please, met fans, do not hold that against me. So I know who Ted Williams is. So I want to go back to the quotes that I started with Seth. And riddle me this, Batman, do you think the nonprofit sector markets itself? Well?

[Seth Godin]

Well, I'm not sure I care about the sector. I care about nonprofits. And I've never met a Nonprofit that understands marketing as well as it could, or markets itself as well as it could.

[Joan Gary]

Talk about that.

[Seth Godin]

Well, there's a cultural assumption that we need to begin with that the podcast is called Nonprofits are Messy. And you know what's not messy? McDonald's isn't messy. If you went to any McDonald's, it's spotless. The truck shows up when it's supposed to show up. You walk in, they serve you what they're going to serve you. It's exactly what they promised on the regular. The reason that McDonald's aren't messy is because they are not on the edge. They are not pioneering. They are not solving an interesting problem. They are executing on something that works. And the reason that nonprofits are messy is because they are pioneers. They are exploring. They are trying to solve a problem that hasn't been solved yet, because if the problem had already been solved, we would have McDonald's running it. And so the thing is, nonprofits are not messy enough. And the reason they're not messy enough is there's this cultural bias that says, you gotta play it safe. You don't wanna screw up. This is too important to lean outside the boat. How do I do this and not get blamed? And if you have that mindset, it's really hard to do marketing properly.

[Joan Gary]

I have found, and I wonder if you have, that leaders actually don't even like the idea of marketing. That they think it's. The technical term that's coming to my mind is yucky.

[Seth Godin]

I was gonna say icky, but they rhyme. Yes.

[Joan Gary]

Yeah. Icky and yucky. Yeah, that's.

[Seth Godin]

Cause they don't understand what marketing is. They think marketing is.

[Joan Gary]

So tell them. Tell them. They need to know, Seth.

[Seth Godin]

All right. They think marketing is hype and promo and shortcuts and spam and. And hustling people. And it used to be those things, but now marketing is what you do and how you do it. Marketing is the story you live by. Marketing is the choices you make. If it touches the market, whether that's the market of people you're raising money from or the market of people you are serving, if it touches the market, it's marketing. And so if you go to a food bank, a food shelter in New York City, and they make you wait in a long line, treating you with disrespect, that was a marketing choice. That if their hours are erratic and not posted, that was a marketing choice. If they are offensive to people of color or to people with different choices about how they live their lives, those are marketing choices. And the same thing is true with who you decide to raise money from. If you decide to raise money from foundations, you made a marketing choice. And so we're already doing marketing. The question is, could we do it better?

[Joan Gary]

Marketing is about, I think my quote at the beginning, people say, oh, my organization is a hidden gem.

[Seth Godin]

I love that.

[Joan Gary]

Really? I mean, come on. If it's hidden, it's not a gem. I mean, and how could you shun the idea that more people need to know about your thing, that more people need to be really super engaged in your thing?

[Seth Godin]

There are lots of reasons why more people isn't the answer.

[Joan Gary]

Okay.

[Seth Godin]

There is a well known restaurant in Los Angeles that had an unlisted phone number for years back when the only way to reach a restaurant was by calling them on the phone. That the very act of choosing to be hard to find, hard to get into, et cetera, made people want to talk about it and let them be picky about who their customers were.

[Joan Gary]

Interesting.

[Seth Godin]

So the answer is, you know, I work with a nonprofit and they had a chance to be on Oprah, and I traded in a lot of my currency with that organization to persuade them not to do it. And the reason is simple. Because their average donor was a $40,000 donation a year. And if you go on Oprah, you get a lot of $20 donations. And then what do you do? Because now you're hooked on $20 donations, but you can't get back on Oprah anytime soon. So you have to make a choice. Which is, are you going to say we're only going to have a thousand donors a year, but each one of them is going to kick in 20, 30, $40,000? That's the kind of organization we're going to build. Or are you going to say we're going to be Save the Children and we're going to dial for dollars all day, every day because that's the only way you can add up enough $20 bills to get to our number. These are choices. So it's okay with me if you don't want to reach a lot of people. It's not okay if you are struggling with the people you've got and you aren't telling a story that either gets them to be more supportive, gets them to tell their friends, or helps you shift to a different group of people who can support you.

[Joan Gary]

Okay. But I could argue that I want a lot of $20 donors. Even. I want $20 donors. I want $250,000 donors and I want $5 million donors. Because when somebody makes a gift of $20, they're at the bottom of my sort of pyramid of giving, okay? And they have actually entered my ecosystem. My job is to identify of those $20 donors, how can I keep them close? How can I learn about them and find the $250,000 donor that is in that $20 pond? I mean, think about this way, Seth. Volunteers are more likely to give money than any other cohort with regard to an organization because they have been drawn in to meaning and purpose. Right? And so I tell the story about a guy who used to send us 200 when I ran GLAAD, who sent us 250 bucks a year, and he always asked for audited financial statements. My development director was like, come on, why do I have to send audited financial statements to a guy that's only sending us 250 bucks? Well, the number started to grow and as it turns out, we did our homework. And this was actually Microsoft employee number seven. And when the gentleman passed away of blessed memory, he left us $3 million. So I could push back and say, I'll take $20 donors all day long. I just have to do the right thing with them.

[Seth Godin]

Yeah. So I cannot argue with this in the specifics, in the abstract. I think it's a distraction and here's why. Everybody who gives money to a non profit is a customer. And what they are buying is not a tote bag. What they are buying is the story they tell themselves about what they did. And if that story is worth more than they donated, they're happy. If it's worth less than they donated, they don't donate. That means that the nonprofit is on the hook to deliver a story to the donor. And when you say it's an emergency, we need $5 from you today because an earthquake happened this morning and someone's going to die tomorrow. You can raise $5 donations that way. Most of those people, if we look at the evidence from Save the Children and the Red Cross, do not come back because you got them in during an emergency. The alternative is to say, we are for people who want this story and we're going to live this story. And this story is a story of nuance and patience and investment and time. Now, if someone hears that story and sends you $5, for sure, we celebrate that. We have a parade and we engage with that person over time to find out how they can tell themselves more of that story in the future. But when you rush to acquire donors who respond to spam, you have to Become a spammer, and you have to do more spam to get more donors like that. That's who you become. On the other hand, if you say people like us do things like this and you can be very clear about who the people like us are, you're more likely to get people like us. So what we learned from marketing is that the person who buys a $100 bottle of vodka and the person who buys a $7 bottle of vodka tell themselves different stories about vodka. It might be the same thing in the bottle, but the people who make $100 bottles of vodka should not be running around trying to persuade the $7 bottle people that they're wrong and they should switch. What they need to be able to.

[Joan Gary]

Do is find the other people and find people who want to buy $100 bottles of vodka.

[Seth Godin]

Exactly right.

[Joan Gary]

The story they tell themselves for me. And we're going to bounce around because it's my podcast and that's what I feel like doing. And you seem like a bouncer to me, not in the literal sense. You don't look at all like a bouncer, as I. You know, the stereotype anyway. The story they tell themselves. You talk about marketing, and again, if I get it wrong, you're going to tell me it's about the person, about me. It's about me, what I need, what I want. Right. How does that fit when. What I am marketing. And if you want to call me Pollyanna or something like that, I'll take it. Although Pollyanna doesn't wear bow ties, as best I figure, I believe that people who give. So I. So I give money, okay? I give money to causes I care about. It makes me feel good to give money to causes I care about. I want to solve big problems, right? But it also fuels me with meaning and purpose. Right. I feel like I matter in some way. Does that mean that when I market, pick an organization, whether it's food rescue or animal welfare or LGBT advocacy, I know a little bit about that, right? Do I have to make it about the person I'm talking to? There's something about it. Something about your conversation where you said the story they tell themselves or the story you want them to. You didn't really say the story you want them to hear, but could you differentiate between those things because.

[Seth Godin]

Sure. Let's use. Let's use some examples. Okay?

[Joan Gary]

Please.

[Seth Godin]

In 1975, my dad was the volunteer head of the United Way in Buffalo.

[Joan Gary]

Okay.

[Seth Godin]

It was one of the three biggest charities in town. And he did the math and he discovered that people who gave more than $1,000 individually, there weren't very many of them, but they ended up to a lot of money. And he made a list of those people. And then he started to go to circles of people who weren't on the list. And he said, hey, these people, you know, Max Jacobs and these people and these people, they're on the list. It's a shame you're not on the list. And he doubled the size of the plus 1000 roll because he didn't talk about the Boy Scouts, and he didn't talk about all the other important things the United Way does. He said, people like us do things like this, that there is a circle of people, and you identify by being in the cohort. People basically only care about three things. Freedom from fear. And then the two things that drive us forward are affiliation and status. Affiliation is who's to my left, who's to my right, who do I fit in with? And status. Where am I on the lunch order at the Oasis? Those are what drive people forward. So we can tell a very nuanced, complicated story about eradicating polio station 10,000 miles from here, and that if we can just raise $10 million, polio could be removed from the face of the earth. But the person we are talking to is going to donate to us because they want to tell themselves a story of utility, of being involved, of being well off enough to be able to pay something forward, et cetera, that sooner or later, everything we choose to do goes through the lens of what story did I tell myself about this? And the problem that nonprofits have is that the work they're doing is worthy and difficult. And they would just want people to see what they see, know what they know, want what they want. And that's a pipe dream that never happens.

[Joan Gary]

It feels so cynical. As somebody who ran a nonprofit, it feels cynical that we cannot. Are you saying I can't, as somebody who runs a nonprofit? I did this thing with a board one time, and I was helping them to tell the story of their organization, which was complex, and it was too complex for people to get it. And so I told a story as if I was a major gifts officer at that organization. And the CFO just looked me in the eye, and he said, I know what you're trying to do, Joan. You're trying to ignite my amygdala. I said, yes, I am. Although it sounds kind of naughty. I am trying to ignite your amygdala, dude.

[Seth Godin]

I don't think it's naughty. I think that what we're doing is being of service. I think we are developing empathy for all the people we serve that if you're running cause it helps people with tuberculosis continue to take their meds and you don't tell them a story through their lens, they're going to die. Right. I think everyone understands that the empathy must be brought. It's not, oh, well, if I were you, I'd take my meds. You're not me. Right. They're me. And the same thing goes for a donor. Is it cynical for a major museum in New York City to say you can be a board member if you give us a lot of money? Right. I'm not sure that's cynical. I think that is serving the people who then give them the money they need to serve the people they seek to serve. Because if you just went to people and said, give us all this money, you can look at this picture by Rodin, then anyone can look at the picture. That's not why they're going to give you a million dollars. They're going to give you a million dollars because they seek the status and affiliation that comes from being at the table with all the other people. So I don't think it's manipulative because you're giving them something they want all along. Manipulation is when we use people's desires against them here. We're using people's desires with them and for them.

[Joan Gary]

Okay, I'm percolating. And the thing that's going to come out of my mouth is nonprofits have a huge issue. They can bring in new donors. They can't hold on to them. Right. We call it the leaky bucket. Right. And boards never pay attention to the retention stat of their donors. They just look at the bottom line. Did you bring in $3 million? Did you bring in $10 million? I did. Did I have to actually get X percent new donors? Because I lost the other ones because it was more transactional, because I didn't steward them, because I didn't keep them informed? Well, let's not talk about that.

[Seth Godin]

And so, ding, ding, ding, ding, ding. And let me just talk about the consequence of this. The consequence of this.

[Joan Gary]

Wait, I'm going to interrupt.

[Seth Godin]

You're burning out your. You're burning out your fundraisers and you're dialing for dollars by spamming people and you're using up all the consumers. Consumer fundraising is down because we've basically spammed ourself into a corner.

[Joan Gary]

Okay, so, okay, so now connect the dots with Me, Seth. Right. You're talking about the story they tell themselves. Marketing is about me, me, me. Right? Bring in, get the money. Right. I know that you're working on something with a charity auction. And the idea is to get the thing, the Michael Jackson jacket or whatever the thing is, and raise as much money that it's going to go to. Fill in the blank organization. Did I stick to the jacket or did I stick to the organization?

[Seth Godin]

I think I stuck to the jacket. You've amplified some of my ideas with hyperbole in a way that isn't as helpful as it could be. Let me try to see.

[Joan Gary]

Okay, you mean which isn't fair, but that's go, go, go, go. Because I think that people do. I do think that it could be read that way.

[Seth Godin]

Some donors wake up in the morning and say, I will give. If there's an emergency right in front of me to make the feeling of pain go away, I will give as little as I can and then I can go back to my life. Some donors wake up in the morning and say, wow, there's a charity auction. I bet I could hustle the system and get a beach house at a discount. Wow, there's a gala. I think I can go because all the other people I need to sell insurance to are going to be there and I'll be able to be at the right table. And some people wake up in the morning and say, you know what? I learned from my parents, I learned from my parents that sticking with something is the kind of thing people in my family do. And what I learned from my parents is that having a long term relationship and a seat at the table is worth the loss of drama that comes with that. Now you, the fundraiser, get to pick which of those sorts of people you want to raise money from. And if you go to somebody who is responding to a picture of a starving kid on an Internet ad and sending you $5, why are you surprised that they don't instantly renew and sign up for auto renewal and stick with you for years because you brought them in under the wrong pretense? It's the same way if you go to a hookup site, don't be surprised. It's for one night stand. Right? And so the discipline here is to say, we're not going to go on Oprah. We're going to painstakingly pick donors who want to go where we are going. And if you are, I'm talking from personal experience here, some fancy pants person who wants to be the boss of everything and give as Little money as possible. No, thank you. We'd rather not have you on our board, and we'd rather not have you as a donor. If you are not turning away donors, you are not serious about how you are marketing your organization.

[Joan Gary]

So if I run a golf tournament for my organization, right, and you like to play golf, and you don't actually give a rat's ass, in fact, you can't even remember what the organization is, that I'm donating my money. I just want. I want to play 18 holes of golf. That it's a fantasy for me to think that I could actually figure out some strategy to bring those people closer to my organization and actually get them to do.

[Seth Godin]

It's not a fantasy, but you need two teams. You need a team of people that's going to get the top of the bucket to be filled with as many golfers as possible.

[Joan Gary]

Okay?

[Seth Godin]

They need to do that without regard for anything else, because you're making a profit running this golf tournament. And then you need a second team of people that says we're going to have a small window of time and attention from the people in the top of the bucket. Your job is not to have a quick new transaction with them. Your job is to identify people who will believe that their status and affiliation will go up if they come to one more meeting with us, if they listen or ask one good question, or if we ask them one good question. What we're trying to do with that little tiny spark of attention we got is not repeat the golf tournament, but instead say, now I have a chance to quietly tell a story, right? I have a chance to quietly tell a story to somebody who is going to at least tolerate hearing what I have to say. And it's that transition where social media falls apart because people race to get Instagram followers or whatever it is, and then they hope to convert those people into something more than that. And the conversion rates keep going down, down, down. Because the hustle you have to do to get people in the top of the bucket distracts from the very story you're here to tell. But a successful nonprofit can figure out, like the Fuller center in New York. Fuller center builds houses and helps people who are unhomed find a place to live. Okay, you may recall Habitat for Humanity, it's not that hard to get a company to send 50 people to a build. And it's a good team building thing. But then what you need to do at the build is figure out which two of the 50 people will volunteer to come back next weekend to Do a small, separate thing because we become what we do. And the people who are there the first time are there because they got sent there for a day off from work. The people who come the second time are there for a different reason. What are the conditions that they are surrounded by? How do you make this part of their identity? So now 20, 20 weeks later, they're a week. They're coming every week. Now you've started that person on the path to want to engage with the story. You can tell them, but you can't do it by yelling at them at a gala. Because that doesn't work.

[Joan Gary]

It doesn't work. Yes. Yelling at people generally doesn't get them to give you money. It's kind of a good rule of thumb.

[Seth Godin]

The Nonprofit Leadership Lab is led by Joan Gary and is the world's best online community for leaders of small nonprofits. Learn how to raise more money, build the board of your dreams, grow a large audience of supporters, and so much more. To learn more and request an invitation to become a member, please go to nonprofitleadershiplab.com podcast. That's nonprofitleadershiplab dot com podcast.

[Joan Gary]

We're talking with Seth Godin. I'm not going to reread his bio. You can see it in the show notes. He is all things marketing and innovation. We've been talking about marketing. I want to shift a bit and I want to talk about innovation. The actual DNA of nonprofits is innovation. I found that during the pandemic nonprofits. And again, I'm painting a broad brush. I get that had to innovate, didn't have a choice. So that the kids theater, their kids weren't coming to the theater to do the production of Willy Wonka and the Chocolate Factory. And so they came up with some way for them to make videos. And they did these really cool things that you talk about schools and what they did. They threw what they knew out the window and they took risks and they tried new things. And it was for me, the treasure in the darkness of the pandemic for the nonprofit sector. And they didn't ask their boards for permission. Perhaps they didn't ask them at all. They just actually just did what they needed to do. And for me, it was like watching what nonprofits ought to do every single frickin day. And it has been a. I don't want to. I am a very optimistic human. But it was disappointing. It has been disappointing to me. And I use my platform to remind people about how incredibly energized they were during that time because they were exercising new muscles. They were creative, they were responsive. They were thinking about what's possible. They were coming from a place of abundance and not scarcity. And I do not believe that nonprofits can actually move further in the direction of the pursuit of their missions unless they think that way. And I have seen it rather dissipate in a way that's troubling to me. And so I want to actually talk to you. I said nonprofit leaders are risk averse. Talk to me about this, you know, sort of how you think about the nonprofits and their sometimes their kind of fear of change, their risk aversion. How could that. Right. How can that possibly be? When you said everything that ever happened in the nonprofit sector was once an innovation, what has happened here? And do you agree with me about the pandemic?

[Seth Godin]

What does risk averse mean? I think they're actually a. Afraid of failure.

[Joan Gary]

Yes.

[Seth Godin]

And we've.

[Joan Gary]

We've built different.

[Seth Godin]

We've built a culture where failure is a bad thing. Right. And yet scientists, real scientists, do nothing but fail until they figure out what works.

[Joan Gary]

Yep.

[Seth Godin]

And if you are working on a problem, meaning there are some nonprofits that are actually McDonald's, there are some nonprofits that just have to churn the thing out over and over and over again. But leaving those nonprofits aside, almost all other nonprofits are trying to solve a problem where the solution is not yet known or optimized, which means that you're a scientist. So the question that I would ask to begin this conversation about innovation is where is the newsletter that you published listing all of your failures and how often is it published? And if that seems absurd, then let's acknowledge that you don't really want to do science. Why not find 10 other nonprofits that sort of do what you do and agree to exchange with each other a journal in which you all tell each other things you did that didn't work so they don't have to make the same mistakes? Things in fundraising, things in serving clients, things in dealing with foundations, things in board management, all the mistakes. Don't tell me any of your wins. Just keep creating this status that comes with. We are willing to make small failures on our way to the big success we seek. And if you look in industry, that is how we got all the things. We got the way a car can now drive for hundreds of thousands of miles without breaking down compared to a Pinto from 1971. There's no comparison because they chronicled and shared all of the failures of every single piece, every single part, every single approach so that you don't do it again and that you're not afraid of improving it. So that's where this begins. The reason that nonprofits innovated during COVID is it was emergency. And during an emergency, we're willing to suspend certain rules. But what you are arguing very eloquently, is this rule should always be suspended.

[Joan Gary]

Yes.

[Seth Godin]

And what we need is a board and bosses who every time they meet someone in the organization, don't say, what's working and how are you doing. They should say, tell me three things you tried that didn't work. And you need to have those ready to say at all times. And if you don't, if you run out of them, you better go get some more of them. And, you know, I'll give you one example, and then I'll give you back the microphone. When I was running Yo Yo Dine, when invented email marketing, we were one of the first Internet companies. We had a salesforce of 17 people, and they were all calling people on the phone. And I bought them all a $29 Radio Shack tape recorder. And I said, I want you to record all your calls. And then every week we have a meeting. And at the meeting, all 17 people, they bring one minute of audio that didn't work and one minute of audio that was great, and they play it for all the other salespeople. Love, change, everything, right?

[Joan Gary]

So the reason I use the word risk averse is because of boards of directors. So boards of directors are poorly recruited, not educated, again, broad brush. And they believe their job is to manage risk, to make sure that nothing goes wrong, because nobody has told them that being strategic or having generative conversations is part of their job and to think expansively about what's possible. And so they look over the shoulders of the nonprofit leaders, and they look at those financial statements, and they say, oh, there's a difference. The percentage increase is not as high as it should be, or your expense is 6% higher on a $20 item or some nonsense. Right. And so I, as a nonprofit leader, have a board that instills in me a risk aversion because they believe their job is risk management. Right. How do I shift that? Well, yes, of course, I actually recruit different kinds of board members and say, if you want to come play on our house, you need to know that I take chances, I pilot things, I learn from those things. Right. And I get better at them every time. And I talked to donors about that, and I talked about that being a part of the culture of my organization. And that brings new people to the table. But we don't do that. And so nonprofit leaders are constrained by the power that comes from boards who only want to make sure nothing goes wrong.

[Seth Godin]

Well, so again, let's get back to the systems that work here, because we don't live in a culture where there's just a pot of money from everyone that's allocated to by priority to non profits. Instead, we have a culture where people voluntarily give money to non profits or foundations do. Why do they do that? Because it raises their status or affiliation and the story they tell themselves. And we've built into the culture that the best way to do that is to give money to reliable, high profile, high standard organizations that we will not be embarrassed by.

[Joan Gary]

Right.

[Seth Godin]

And so a nonprofit I worked with had a small scandal and their donations went to zero and board members did, and then it's over. Right. It doesn't make any sense. What about all the people that they served? Not just the donors, but mostly the people that they were existing to serve. So if you're going to raise money from people who are buying that story, then that's exactly what you're going to get. So there are a couple things that we can do within that system to make it possible to innovate. The first thing is this. I think almost every nonprofit should have both a board of directors and a board of advisors. And the board of advisors should have no power, but plenty of profile. And you can sell slots on the board of advisors to big donors, but the board of directors should be professionalized in the sense that there's not very many of them and they are signing up for a rigor in how they're going to manage the institution. So when I see a nonprofit that's got 40 people on its board, I understand that they have a dysfunctional board no matter what.

[Joan Gary]

Indeed.

[Seth Godin]

The second thing is that like real companies, you don't want to go out of business. And when you innovate, you don't want to innovate and have the gas tank explode. You want to innovate in things that are controlled.

[Joan Gary]

Yes.

[Seth Godin]

And so I would identify two paths. Inside the organization. There is the steady state. We don't make mistakes. The accounting is perfect, the outcome is predicted. And then there's a lab, there's a Skunk Works. This is a place where things happen very fast, where the budgets aren't very big, where the fallout if we're wrong isn't horrible because no one's going to die. But in that Skunk Works is where we are going to pilot things where we can then combine back to the mothership and say, we proved this one.

[Joan Gary]

Yes.

[Seth Godin]

And then they take it over. And by dividing them, you don't have to change the system. You don't have to change the story the board is telling themselves. They get to tell themselves, I am an esteemed overseer of something that everyone expects. Oh, and by the way, I'm doing this thrilling thing over here, but it's small enough that if it doesn't work, no one cares.

[Joan Gary]

What is my board of advisors? Are they the who are? I mean, I get who you're describing. What is their charge in your world?

[Seth Godin]

Well, your job is to make those people feel like the story they bought from you is legit and resilient and they want more of it. So that board of advisors becomes whatever needs to fit into that story. So, for example, I could imagine that their obligation is two full days a year. They go to an off site, which, with the leadership of the thing, and challenge people to have brainstorms, whatever it is. Or perhaps there's an email they get every week and they have to write something back. I don't know what will make them feel like they are part of the circle they need to be part of. I have been parts of board of advisors like that, and I can tell you that sometimes I leave and my eyes are bleeding because it began with let's go around the room and have everyone blah, blah, blah, and ends with nothing much. But I've been to other ones where I felt like I was in the right place with the right people at the right time.

[Joan Gary]

Yeah.

[Seth Godin]

And it's an art to build what this board does. But the good news is you don't have to deal with any fiduciary nonsense or any legal nonsense because they're advisors, they're not directors.

[Joan Gary]

And so they're advising on how. On a more. On a higher altitude. At a higher altitude? Is that what you're suggesting?

[Seth Godin]

Or they could just be chiming in about the new logo design, because everyone has an opinion about a logo design. We're not manipulating them, but we're giving them something that makes them feel good because that will make them want to not quit the board of advisors. And you have so many degrees of freedom about what you can offer them in that role. And in exchange, they will become much more loyal and much better donors because they're part of it.

[Joan Gary]

And so is that the prime? Because I have feelings. I have all kinds of feelings, but I have feelings about boards of advisors. That the ones that don't work, they don't work because it's not really clear what the goal or the charge is in your world. The charge is to bring donors in and keep them close and make sure that they're continuing to feel a part of things so that they continue to give.

[Seth Godin]

Yeah, I don't think I would tell them that. I think I would say to them, hey, I've got nine of the smartest people I know on my board of advisors. Here's their names. I think you know some of them. I'd like you to be one as well. We're going to meet four times a year. This is what I'm asking you to do. And by the way, they pay my salary.

[Joan Gary]

Yeah.

[Seth Godin]

Okay. Are you in for 10% of my salary? Because I need your help. That's a really persuasive pitch to the right person.

[Joan Gary]

Yeah. We are almost out of time. That's sad.

[Seth Godin]

All of us.

[Joan Gary]

I'm sad.

[Seth Godin]

All of us are almost out of time, actually.

[Joan Gary]

Oh, my goodness. Oh, I'm losing the train of thought about the author who wrote 4,000 weeks.

[Seth Godin]

Oliver.

[Joan Gary]

Oliver Portman. Oh, my goodness. I couldn't decide if I found that book at the age of 66 to be absolutely inspiring and invigorating or whether I wanted to crawl in a hole. And I think the answer was yes. Anyway, with three minutes left on the clock here, you are suggesting that not only are nonprofits messy, but they should be messier. I like that there are some people who don't like the name of my podcast because they think it's a pejorative. I actually think messy is a good thing, that there are treasures in the mess. Leave. So you are talking to nonprofit leaders, board chairs, board members of organizations small, medium, large, in North America and around the world as it relates to marketing and innovation. I give you the last word. Three things you want them to remember to keep in mind to guide them as they navigate this. The ickiness of marketing. The boards who are risk averse, give them three pieces of advice, and I know that that will stick with them. Ready, set, go.

[Seth Godin]

Thank you for showing up and doing the work. It's not appreciated enough and the work is super important. You are already doing marketing. Perhaps after all the effort you're putting into everything you do, you could learn a little bit more about what marketing is and how to do it better. Number two, you are already being of service. That is why the nonprofit exists. Who exactly are you being of service to? Who's it for? What's it for? What is the change you seek to make? And can you help change the world for your donors and for those you serve more directly and with more power? And three, Everything in our life is impacted by the systems around us, unseen or seen. The solar system is a system and it's filled with gravity. And you can deny gravity all you want, but it's really there. Do you see the systems that you take for granted? Are you trying to change systems that can't change? Or are you using systems that could help you advance what you're doing? And what we learned from Joan, episode after episode, is that we can be thoughtful and smarter about the strategy that we bring to our work because showing up to do our job is insufficient. There are urgent problems that need to be addressed, chronic problems that need to be relieved. But we get to address those things when we be strategic about it, when we make difficult decisions in the short run to help us get the results we seek tomorrow. So those are my three things. You can find my work at Seth's blog, but mostly you should listen to.

[Joan Gary]

Joan and I should listen to more of Seth. And thank you. I don't know why the hell I waited so long to find you to come so that I could share 40 minutes with you and share those 40 minutes with the people who are doing some of the hardest work there is. Seth, thank you so much. I hope that our paths cross again because I do believe that marketing and innovation are essential ingredients to changing the world, to to solving the world's biggest problems. And I don't know that we're tackling them the right way. So thank you for being part of our solution today. And so thank you very, very much, Seth for joining me.

[Seth Godin]

It's a pleasure.

[Joan Gary]

And for those of you who are listening, please listen to it again. Listen to it again. Share it with your board. Share it as a pre listen for a board meeting. Allocate 30 minutes of time at your next board meeting to get everybody talking about the implications of what Seth had to say today. This is what I love about my podcast, is that I think it's food for thought and that I believe that sharing it and using it in almost a book club fashion gets people thinking differently and at a very higher level. So in the meantime, take good care of yourselves. Thank you for the work you do and I'll see you next time. Take good care. Thanks so much for spending time with me today. I hope you found the conversation valuable as you navigate the messy world of nonprofits. Check out all my other [e-mail] hope you find them helpful too. Lastly, thank you for the work you do to repair the world in ways large and small. I'll see you next time.