More people may be listening. Have you noticed? Take podcasts as an example. Forty percent of Americans report having listened to at least one podcast (compared to just a third last year), and almost a quarter report listening to a podcast in the last month (doubling the number from just five years ago). Or consider monthly listeners to online radio, which has tripled to 6 in 10 Americans (an estimated 170 million listeners) in the last decade. Listening is also in vogue as a cure for political polarization, and "feedback loops" are now a bona fide “thing,” whether to invest in employee satisfaction or to hone your organization’s social media strategy. 

This fresh focus on listening piqued our interest, given that listening is a key factor in effective leadership and active listening builds trust. This month's Nonprofit Knowledge Matter explores ways for nonprofits to apply listening skills: What can help nonprofits and grantmakers listen more intently to each other? How can nonprofits harness the power of feedback? And, as highlighted in our Special Feature, what should nonprofits and board members listen for as indicators of a potential financial crisis?  

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Listening Through Candid Conversations

At the National Council of Nonprofits, we are constantly keeping our eyes and ears open for emerging trends as well as cultural norms: both those that help nonprofits advance their missions and those that get in the way of effectiveness. One example is the still-too-prevalent myth that overhead, and/or administrative costs, are to be avoided at all costs; another is the power-imbalance between grant-seeking nonprofits and the private foundations or government agencies that hold the purse strings. This power imbalance mirrors the external economic inequity between the “haves” and the “have nots” in our society that so many foundations and nonprofits missions are striving to correct. It also makes it extremely difficult for grantees and grantmakers to have honest, respectful conversations – yet honesty and respect are exactly what’s needed when a nonprofit must let a long-time donor know that it is facing a shortfall, and ask for help – or when a foundation decides to pursue different goals and needs to communicate that decision to its grantees. Consequently, we are on the lookout for ways to encourage honesty and respect despite this power imbalance, such as by creating pathways for grantmakers and grantees to build trust, which is fundamental to candid conversations. We wonder: Are gatherings at which a panel of grantmakers sit behind a table talking to (as opposed to with) charitable nonprofits successful in creating pathways for candid conversations? How can we do better? 

Learn more about our unique collaboration with Exponent Philanthropy to explore "Great Funder-Nonprofit Relationships"

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The Power of Feedback

When we stop listening we may miss feedback that could improve and ease our work. Recognizing this, many charitable nonprofits have created "feedback loops" as an intentional process to ensure that they are first listening to what their beneficiaries have to say, and second, that they incorporate suggestions from those they serve into the nonprofit’s operations and activities.

The classic example of a feedback loop may be a suggestion box. A more modern example is an online survey. If your nonprofit has upgraded its website recently, you’ll probably recognize that feedback loops play an important role in website design. A prime example is the federal government's website, vets.gov: "Our Team used a human-centered design approach to create vets.gov. We've asked our customers what they want and need and we've designed in response to that. We've tested and made adjustments based on their feedback, and will continue to do so as we add new features and information to the site."

Read on for more about the power of feedback loops and to learn about a funding opportunity through Listen for Good and the Fund for Shared Insight.

What are you listening to? Selected Podcasts for Nonprofits

• Putting Racism on the Table  (Washington Regional Association of Grantmakers)

• Fundraising Fundamentals (Chronicle of Philanthropy)

• Nonprofits are Messy (Joan Garry)

• Nonprofit Radio (Tony Martignetti)

• The Nonprofit Ally Podcast (Steve Vick)

   

Special Feature
What are the indicators of a financial crisis? Is the board listening?

If a nonprofit's board of directors were listening to its regular financial report, would board members recognize signals indicating that a financial crisis may be imminent? We certainly hope that your nonprofit's board is not hearing about a potential financial crisis, just as we hope that board members would recognize the warning signs and then help the organization take corrective action.

But, what are the commonly available indicators – such as using restricted grant funds beyond the restrictions, or overusing credit cards - that might be signaling that the organization is heading towards rough waters? What process can nonprofit boards use to conduct a straightforward assessment, without engaging expensive consultants, or tapping the expertise of accountants or lawyers? It turns out that there are many simple questions board members can ask that will help them recognize when a nonprofit's finances are sailing off course.

The Foraker Group, the state association of nonprofits for the state of Alaska, has long championed using a sustainability model as a framework for good governance and sound management practices. Recently the Foraker Group introduced a new tool, Indicators of Financial Crisis, to help boards ask key questions and make sense of some of the financial mysteries of a nonprofit's financial status. Then, based on the answers to those questions, the tool suggests steps to get the nonprofit back on course, if needed. We are always proud to share our members' good work, and we encourage all nonprofits to take advantage of this useful tool – think of it as a handy stethoscope to listen to the nonprofit's financial health!  

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