This may be one of the most challenging times in history to be a nonprofit organization. Nonprofit expert Sidney Smith understood the assignment and has created The Nonprofit Guild to bridge business gaps for nonprofit organizations of all kinds and help them move forward.
TRANSCRIPT:
I’m Jeff Randolph. This small business podcast
is brought to you by EAG Advertising and Marketing.
We’re going to talk about marketing, and we’re
also here to celebrate entrepreneurs by diving
into their story. And we learn a little more
about what makes them tick. Today, we’re talking
about nonprofit organizations. I’ve had a lot
of experience with nonprofit organizations of
all kinds, both as chief marketing officer at
nonprofits focused on program delivery and for
professional associations, and also on the agency
side, where we’ve been able to work with a lot
of great nonprofit organizations. Today, I’m
joined by someone else. knows the nonprofit world
very deeply. He’s a speaker in the nonprofit
world. He’s supported nonprofit organizations
through board service, volunteerism. and by working
with nonprofit executive directors to help move
them forward. I’m excited to have a conversation
and tap into the accumulated wisdom of Sidney
Smith, managing principal of the Nonprofit Guild.
Let’s get into it and welcome Sidney Smith. Talk
about strategies. Talk about capabilities. Building
all your hopes and dreams. Talk about possibilities.
It ain’t rocket surgery. But maybe it is. Hey,
Sidney, welcome to the show. We’re happy to have
you here. Thank you for having me. It’s a pleasure.
I’m excited to talk nonprofit stuff with you
because we go way back in this. In fact, let
me first say, Sidney Smith, Managing Principal
with the Nonprofit Guild. So we’ll get the title
out there. We’ve spoken together at conferences
for nonprofits and not on the same stage. My
stage was smaller than your stage. If we’re honest,
my stage was smaller than your stage. You were
the closing keynote. I was a keynote. We cannot
argue those facts. These are facts. These are
facts. And I’m okay saying that. I’m okay. It
was a good session. A lot of fun. Good stuff.
Let me jump right into it. Let’s talk nonprofits,
because I don’t know, is there a more difficult
time to be a nonprofit? I think this may be kind
of an all -time challenge. I think it is. Unfortunately,
we’re in a space of probably facing similar challenges
to the COVID -pandemic, but without the funding.
environment that allows us to be able to more
easily navigate it. So it’s going to be tough
right now. So I’m a young man, relatively speaking.
I haven’t gone through the entire gamut of the
nonprofit sector over its lifetime. But at least
from where I’ve been over the last years,
I don’t see a more difficult time than right
now. Yeah, a lot of challenges. Well, we’ll get
into all those. Let me start with just kind of
the overview and kickoff of nonprofit life. Because
it’s on your LinkedIn. You say it all the time.
time. Nonprofit is a tax status, not a business
model. Let’s talk about that for a minute, because
that’s a great stinger line right there. It is.
I tell you, for those that don’t know, my background
is business. you know, educationally, undergrad
and grad school is a business. And so for me,
I recognize all of the great things that come
with being a tax exempt organization. But I also
recognize how we as nonprofit leaders can easily
pigeonhole ourselves into just focusing on contributed
revenue, right? Individual donations, grant funding,
those sorts of things. And I think that what
I strive to say in that state, is that the fact
that you are tax exempt does not equal a functional
business. And so that’s where that phrase comes
from. And this becomes synonymous with me because
I’m really passionate. That kind of serves as
my North Star. It’s a good North Star. And I
think given the climate, this is a time where
that wisdom shines true. We need to focus on
the business angle of things. You’re starting
something new. And that’s called the Nonprofit
Guild. And I think this is maybe your first interview
that you’ve done since starting that. So, hey,
thanks for showing up for us. Gave you the scope.
Thanks for timing your career out so that we
could be the first one to talk about it. The
Nonprofit Guild, tell us all about it. What do
you think in here? A couple of things. What I
strive to do is like any good business person,
I believe, is you look at the marketplace and
you find out where are the gaps. And so I felt
that there was a gap in the conversation around
business fundamentals of nonprofits. I think
there’s a lot of conversation around storytelling,
a lot of conversation about good donor engagement.
But unfortunately, I don’t think that there’s
enough conversation around just very pragmatic.
fundamentals as it relates to business. You know,
is our marketing dialed? Do we have a good strategic
vision? You know, those sorts of things are…
Are our expenses, are they in a place to where
they can keep up with the revenues that we’re
bringing in or is it vice versa? So if we’re
able to have those types of conversations, that
is what the crux of the nonprofit guild is, is
bringing more attention to that conversation.
Gotcha. And so is this a consultancy type of
approach or what does it look like to work with
you? Well, for an organization that is less than
two weeks in its existence right now. I’m still
writing standard operating procedures and I need
to. I’m still trying to get my website set up,
those sorts of things. In its core, it is a consultancy,
but the big picture of the Nonprofit Guild is
to create this nationwide network of business
-minded nonprofit professionals that’s able to
pull on one another for resources, shared knowledge,
the ability to be able to have the conversations
of, hey, how do we make our businesses stronger?
I think that the Guild, that word is very intentional
for me. So, you know, guild historically has
been kind of a word that isn’t really used in
modern day vernacular anymore. But a guild is
simply a collection of skilled craftsmen that
share resources and things to be able to, you
know, advance their craft. And so my goal is
having a collection of nonprofit leaders that
are able to pull together as a community to be
able to make sure that we’re able to advance
the business of nonprofits. So there’s a community.
aspect of it absolutely you’ve got you’ve got
people coming together peer -to -peer yes and
then you’re also helping to to guide them along
and get them where they need to go yes that is
the goal that is hey well you know you have to
start with that that’s right and then we can
come up with where we go next right um so yeah
brand new and and and putting it out there to
to help help bring these people together which
is spectacular thank you thank you um yeah and
and Let’s talk about all of those many challenges
then because the situation is intense. No matter
how mission critical the work is, if your revenue
depends on politicians or agencies or even large
donors, there’s vulnerability there. Donor -led
revenue is powerful while it’s there, but that’s
never guaranteed. So no matter how deep the history
or how strong your outcomes are, nonprofit organizations
are now going down this path where they need
better control of their revenue. The climate
is clearly pushing people that direction, where
you need to be the master of your own fate. When
nonprofit leaders are talking to you, because
you’ve had a long career of doing exactly that,
are there positive takeaways from those conversations,
or this isn’t just all doom and gloom? charting
a course forward in positive things. What are
those conversations like? What are they concerned
about? And how are we having those conversations?
Yeah. So I think that the main thing is, is that
there is a lot of angst right now as it relates
to just kind of the funding environment in total.
Obviously, we hear a lot about the federal funding
environment and the pulling of federal funds.
But many organizations, especially your smaller
nonprofits, don’t receive federal funding anyway.
And so that’s one thing that, although is a big
thing for many, for many of the organizations
that I have close relationships with, that isn’t
really a major thing for them. The issues that
they’re running into, though, is this sentiment
of customer confidence, consumer confidence,
right? And so there’s this notion of prices continue
to rise and wages continue to stay flat. And
so in that gap is where we have that consumer
confidence. And I think that where we’re struggling
with right now is many people. give out of their
excess, right? So my wife and I, we give charitably,
but if things are tougher or are tighter for
our personal budgets, we’re not able to give
as much. And most people fall in that category.
We need to make sure there’s food on our plate
first. Absolutely. Then once we’re secure, then
I can spread the love. Correct. And so I think
that where you’re finding is a lot of nonprofit
leaders are at a point now to where they just
don’t. They don’t have confidence because their
donors and the funding sources that they’ve traditionally
relied upon aren’t confident either. And so you
have a lot of things right there, but it is not
all doom and gloom because I think to your point
earlier, there’s this notion that we can do differently.
And we’re in a point now to where we don’t have
a choice but to think differently and act differently.
And so I think that there’s a lot of… interest
in having these conversations around more earned
revenue models as opposed to just relying so
much on contributed revenue. Right, right. And
earned revenue, so we’re talking about programs
in some cases, right? But it isn’t programs for
every case. In some, it could be, well, our membership
dollars need to be… shored up or we don’t have
any of those things and we’re a charitable outreach
where we’re actually you know funding the we’re
doing mission at this point how can I invent
a revenue model to go there like that’s those
are Some of those hills are bigger hills to jump
down or to climb up. Yeah, very big hills. And
I think that that’s where the discussion has
to happen. Before we know where we can go, we
have to be able to visualize that that’s even
a possibility. And so I think that with a lot
of nonprofit leaders, I believe my goal and my
place in this sector is to help to shift the
mindsets of the nonprofit leaders to say, hey.
For us to get to a place to where we can start
to really, truly tap into all the possibilities
that are out there for us, we need to start thinking
differently. I know a big thing that one of the
a saying and a cliche that I really love is it’s
not about the resources we have, but it’s how
resourceful we are with the resources we do have.
And so, you know, just thinking about all of
us have unique traits and characteristics and
things that make us unique. both individually
and organizationally, and what do we have at
our disposal and how can we make best use of
that moving forward? Yeah. I can say that one
of the things that has always… been a good
thing for me or has been engaging and helped
me stay focused and energized in working with
a nonprofit is that you don’t have an unlimited
supply of resources, right? And that’s where
creativity comes in. That if I had, you know,
all of the money in the world and could do anything
with it, there’s a whole lot I would do. And
I would make some tough choices, of course, because
you… Money is finite at some stage. But their
problems really aren’t that big. And when you
don’t have the resources, when you don’t have
that, whether it’s a full team that you’re looking
for or the consultancy, or if you don’t have
a budget to do outreach, that becomes a real
challenge for somebody. If you’re a problem solver
as a tactician, you look at that and you go,
okay, anybody could do it if they had the money.
How will I solve this problem? And there’s a
lot of creativity that comes in. I think there’s
some good creative thinking that needs to happen
in the nonprofit world at this stage. And for
somebody who looks forward to that kind of a
problem, that’s great. If you don’t. Let’s let’s
get some friends together and let’s start thinking
through those problems. Absolutely. Yeah. And
enters the nonprofit guild. Right. And so I think
that, you know, one of the things that I’ve been
able to really, truly understand in this is the
need to, you know, a lot of innovation. Innovation
is an invention. We’re not asking you to create
something that hasn’t been created before. What
we’re looking at is what do we have at our disposal
and how can we as an organization do things just
slightly differently, right? Look at it in a
different way. I think about organizations like
local here to Kansas City, we have Reconciliation
Services do an incredible amount of human services
work within our urban core. They have Thelma’s
Kitchen. Thelma’s Kitchen does box lunches, right?
reconciliation services wasn’t created to serve
box lunches. But what somebody within their leadership
at some point in the past said was like, hey,
you know what? This can align with what we do,
the work that we do, and it fills a need. Why
send somebody to a for -profit catering company
when we can do box lunches here ourselves? It’s
looking at your resources and finding out what
can I do and how can we think differently about
this problem. A lot of times that brings up a
different organization where I need to partner
with somebody. And if you’re partnering with
somebody that’s totally out of your normal kind
of day -to -day, that’s… a great partnership
to, to find. But oftentimes the, the big, you
know, challenge with nonprofit organizations
is, um, I’m partnering with somebody that normally
I’m competing against, which, which has inspired
the term coopetition. And I, I, I’ve always loved
the term coopetition. Um, but you know, we, we,
uh, nonprofits are, are frequently forced to,
you know, partner with somebody that they wouldn’t
normally partner with. Um, but there’s, you know,
there’s still opportunity there. So we, we need
to start thinking. little more differently, a
little more creatively at this stage. I think
so. Yeah. Yeah. I think that we’re in a space
to where, you know, trying to open up the lens
to nonprofit leaders in our sector that these
are the challenges that are faced in business
at large. And so there are often challenges and…
coopetition that happens as it relates to different
organizations in various industries. And so we
need to be okay with the fact that, hey, let’s
exhaust every avenue we possibly can. Let’s look
at what are those earned revenue opportunities.
What are some of the things that we can do uniquely
well that may fund the mission? Because just
being completely candid and transparent. Much
of the stuff that we do is our loss leaders.
And so, you know, the work that we provide for
whatever our mission purpose may be, those things
don’t, not only do we not make money on them,
we typically lose money doing those things. And
so looking at the business in a totality, we
can’t have loss leaders and not control the revenue
that comes in. That’s just a recipe for long
term. You can do one. You can do one of those.
Exactly. You can’t do both of those at the same
time. Jumping back into the Nonprofit Guild,
what’s the future look like? If you put yourself
even a year in the future, what’s it look like?
For me, I think that if I had my way, the Nonprofit
Guild… has a national scope where we have a
community of, of nonprofit leaders that are all
in community serving and sharing one another
best practices as it relates to just good. business
sustainability and not just sustainability, but
thriving, right? Like, you know, we need to have
businesses that are profitable, that are able
to reinvest in themselves and each other. And
so ideally that is that. I just, I was telling
you before we started, I’m happy, excited, and
scared at the same time. I just – I’m sure there’s
a word for that. Yeah, probably so. Right. But
just released a question assessment. It’s
called Guild Check. So the nonprofit guilt check.
But it’s a nonprofit business audit. And what
it does is it takes a nonprofit leader through
questions over eight domains, things such
as brand and awareness, financial health and
sustainability, strategic clarity, executive
leadership and board governance, all the things
that in totality makes for either a strong nonprofit
or a not so strong nonprofit. And so it allows
a leader to be able to go through. take that
assessment and then receive a score to help them
understand, hey, you’re strong in this area,
but you could use some work in these areas. And
oh, by the way, the area that you’re strong in,
if that area, if you have weaknesses in these
other areas, right, that might erode and affect
some of your strengths. And so being able to
just give people a benchmark. that they can move
forward with and then be able to have some tangible
next steps. And so that’s that’s the first piece
of the puzzle. And so being able to, you know,
hopefully have proof of concept here and around
Kansas City and in the Midwest. And then hopefully
at some point we get enough feedback and data
where we’re able to make some revisions and then
get this thing nationwide. That would be. A great
first year. That would be a good first year.
And I love the assessment. I can hear in that
assessment the strong business aspect coming
through. There are a lot of different things
that as a nonprofit organization, we’re like,
oh, this is unique to us as nonprofits. And that
is certainly true. And I can hear some of those
things in that assessment as well. But yeah,
at the end of the day, there’s a lot of business
that… needs to be understood. And I can’t tell
you how many times in my nonprofit days where
I was actually working in the nonprofit, not
the agency side, serving a nonprofit, where you’re
so close to the problem and you’re looking at
that same issue over and over again all day long.
And you’re trying to, you kind of beat your head
against a wall saying, yeah, it’s the same problem
I faced yesterday. And let’s see if a solution
magically comes. A lot of times having that distance
and the peer -to -peer really helps uncover some
good opportunities. Yeah, that’s my hope. And
I think that we’re in a space to where, again,
because the climate is how it is as relates to
funding or the lack thereof, and not just lack
of funding, but probably diminishing funding.
Yeah, and lack of support and challenge in sustainability
and where it goes forward. Yeah, no. Yeah. Yeah.
So I think we’re in a space to where leaders
are… being forced to take a look at some things
just a little bit differently. And, you know,
in my personal life, professionally, I’m very
big on controlling my controllables. And so when
we have so much of our livelihood and the ability
for us to continue to do the mission -related
work that we do, if it’s in the hands of others,
as we talked about, politicians, major funders,
those sorts of things. it doesn’t ever allow
us to be able to really chart a path that might
be transformational, right? We’re always going
to be beholden to somebody else. And so how do
we start to have the conversations or how do
we take more of that control in and on ourselves
and be able to move forward that way? Outstanding.
Hey, if it’s okay with you, I’d like to use this
as the opportunity to go into the lightning round.
Let’s do it. We’ll make sure that you, I mean,
you knew we would talk about the nonprofit guild
and nonprofits in general. You have no way to
know what kind of thing I might ask in this section.
Yeah, let me get my mind right. Get ready. Get
prepped for it. Let’s talk about podcasts for
a minute because you consume a podcast or two.
I do. What are the ones that you find most valuable?
What are you listening to these days? I’m a big
fan of Diary of a CEO with Steven and the guests
that he brings on. And that long format, that
long form format, I just love. A lesser known
individual out of Las Vegas, Omar El -Takrori.
So those that may have followed some of his work
with Think Media, he branched out on his own.
And so it’s a lot about personal branding and
those sorts of things. So those are two that
I am on repeat every single week. Myron Goldberg.
Colden is another one that just talks about a
lot of like very informational, aspirational
type type things. So those three, Myron Colden.
Omar El -Takrori and The Diary of a CEO. Those
are my top three. Those are some good tips for
people, too. I know people are driving around
and scribbling things down right now. Going,
oh, I’ve got to bookmark this. Food. We talk
about food on the podcast, especially in this
lightning round, more than we probably should.
But I’m going to say we all have that food memory.
That there is that, you know, I remember this.
And a lot of us chase that around. And we try
to either recreate it or find it again. And sometimes
you could. do that sometimes you can’t do you
have that food memory what is what when you think
of a food memory that is that that comforting
thing that you just have to go to where where
do you what are you finding what are you looking
at you know being here in Kansas City you know
barbecue is is is the thing and so One fond memory
I have is I took a summer. It was probably at
least years ago at this point. I took a summer
where I did a self -directed tour of all the
barbecue places here in Kansas City. That is
a good self -directed tour to go on. Yes, it
was pretty cool. And so, you know, we have the
major well -known brands like, you know, Gates
and Arthur Bryant’s and those things. But I’m
telling you, the classics, right? But the smaller
brands, being able to go and check out some of
those, it was. really cool so that for me that’s
probably like that memory of food where it’s
like i specifically turned myself into a foodie
for summer and and and and and had some some
very hard criticisms and new epiphanies about
some things that i like that were outside of
the classics yes out and hey out with the the
new people who are doing stuff in kids Like Chef
J Barbecue and Harp Barbecue. Oh, man. I’ll give
the shout out to those people. There you go.
I’ll stick on that for a second because it makes
me think you’re away for a trip somewhere. You’re
out for a week or longer even if you’re lucky.
And you come back to Kansas City. Is there a
restaurant that you’re like, man, I need to –
here’s the food I missed on vacation because
they only had – I don’t know. Whatever is local
to that area that you’re at. You know, it is
probably a little bit off the beaten path, but
I can’t help who I am. Go chicken go. Yes. And
a good full order of gizzards with G sauce is.
It’s unmatched in most every community here in
the world. So we have a gem in that. I love,
love, love that. And so when I’ve been away for
a while and I need to get that taste of home
in Kansas City, that isn’t like your typical
barbecue place. Like, yeah, go chicken, go. Full
order of gizzards. Can’t go wrong. That is it.
Nice. Let’s talk about the… best business advice
that you’ve ever received? Because we ask this
question all the time and there’s inevitably
some kind of thing that carries them all across
and they’re a little bit close, but there’s so
many just great pearls of wisdom there. Did you
receive some great business advice at some point
that really sticks with you and I’m assuming
may have helped you come to the realization that
you need to start the nonprofit guild? Yeah.
So there’s two, but one was more foundational
and then the other one kind of built on top of
it. The foundational one was I used to work in
healthcare. So many know I used to be a nursing
home administrator. And so one of the healthcare
systems I worked when was Catholic sponsored.
And so we literally had nuns that were a part
of our leadership. And so Sister Mary told me
very directly, no margin, no mission. And so
what What it helped me to understand was that
the mission comes after making sure that we secure
the margin to be able to do that mission. And
so margin just simply meaning like that spread
between the expenses that we have and the revenue
that we bring in. And so no margin, no mission
was foundational for me. The second piece was
something that’s come within the last few years,
and it’s called environment determines performance.
And so environment determines performance simply,
I mean, this is three words and it’s really simple,
right? Like, you know, you are, we all are products
of our environment. And so, you know, you typically
are some type of, you know, conglomerate of the
people that you’re closest to, friends, family,
et cetera. And so if you are. disappointed with
or upset with where you are, look at your environment
and take the steps necessary to shift that environment.
Oh, outstanding. Yeah, I was actually going to
ask you a question about your… your early career
in skilled nursing to see if there was anything
from that time that really stuck with you, um,
that you didn’t realize would be a, a trait that,
that led on. And, uh, that, you know, you’re
the, the, uh, sister’s advice was, is not where
I was really expecting to get to go. I was, I
was thinking you would probably come up with
something like, uh, well, you should always wash
your hands. Something. We’ll, we’ll see. You
should. Also true. You should definitely wash
your hands. If I gave you a blank check to help
all nonprofit organizations, how would you spend
that money? That’s a great question. I think
that the major thing that you have to do is you
have to become very – I would deploy that money
and resources towards – Getting clear about what
will solve the root causes of the issues that
we’re facing. And so, you know, to be able to
help solve homelessness, right, and housing insecurity,
we need to know what are the root causes for
that. What I would say is, and this is maybe
not a popular opinion, but I don’t believe there’s
enough philanthropy in the world to be able to
solve our societal issues. Money can’t solve
these problems. And so if I had money, unlimited
source to be able to do things, it would be really
to focus on the root causes and really try to
make some inroads that way. So that would be
probably it. And it’s interesting you say that.
It does remind me that even someone like the
Bill and Melinda Gates Foundation, where they
have, let’s just say, some money. they’re doing
good. They’re helping and they’re thinking about
the problem in a similar way, I think, as you
suggest, right? Where they’re saying, what’s
the root cause? Oh, it’s roads. Oh, we need to
build roads or whatever the case may be. But
even with that kind of budget, we still can’t
solve that. Like it takes more. So how do we
get to that root cause and what else can be done
besides just the philanthropy to get there? Yeah,
no, spot on. Let me finish up our lightning round
with this question. I know that volunteerism
matters to you. Where do you spend your volunteer
time? Yeah, so I just wrapped up a… annual
program we do with HBCU Walking Billboard. So
HBCU stands for Historically Black Colleges and
Universities. And so the Walking Billboard is
recognizing that here in Kansas City, we don’t
have proximity to a lot of historically black
colleges and universities. And so just raising
awareness of attendance to and graduation from
those institutions. But really for us, the Walking
Billboard is really more so about raising the
awareness of. And so that’s near and dear to
my heart. Urban Ranger Corps. So Eric Dickinson,
they’re helping young men within the urban corps
just learn those life skills that would carry
them on as great citizens throughout their lives.
Those two are kind of the ones that I spend a
lot of time with just because I have really close
connections to those leaders. But I love a good.
Anything that brings people together for a good
cause and a good purpose, you’ll find me with.
So I do a lot. My role is board chair for Casey
Shepard Center. So one of the kind of the major
meals on wheels provider here in the Kansas City
area. I do a lot of work with them. So those
are probably the three that takes up most of
my time. Urban Ranger Corps, HBCU Walk -In Billboard,
Casey Shepard Center. Yeah. So it sounds like
there’s a certain community aspect to that where
you’re attracted to the community. community
of people who are helping work on this as much
as it is the cause. Absolutely. Yeah, man, that’s
great. Hey, that’s it for the lightning round.
I’ll take you out of the light. Nothing to it.
If there were a bad question in there, we probably
edited it out. It’s fine. I love it. There we
go. We’ll say that there was a stumper in there.
Nothing can stump you. Let’s tell everybody where
they can find you if they want to know more about
the Nonprofit Guild, if they want to talk to
you. personally? Where do they go? How do they
get in touch? So again, give me a little grace,
y ‘all. So it’s been two weeks, but you can find
me personally, Sidney Smith, on most of your
major social media platforms. So you can find
me on LinkedIn. So I think Smith, Sidney, I think
is kind of how they have me classified there.
And the Nonprofit Guild is also on LinkedIn.
We just made our page yesterday evening. So the
Nonprofit Guild is there as well. well. And then
we have a very basic website right now. Depending
on when you listen to this, we might have our
stuff together and a little bit more robust,
but www .thenonprofitguild .com. is where you
can find just general information about what
it is that we do. Please tap in with us. We are
looking to turn this thing into something much
bigger than it is currently and looking forward
to connecting with you wherever we find each
other. Help it grow and help everyone do some
good at the same time. Sidney Smith, Managing
Principal for the Nonprofit Guild. Thanks for
being on the show. Thank you, Jeff. I appreciate
it, man. And that is our show. Thanks to our
friend Sidney Smith. And thank you for listening
to the Small Business Miracles podcast. Remember
to subscribe, leave us a five -star rating and
review. Drop us a line on the website at eagadv
.com if you have any thoughts. Until then, we’ll
be out here helping entrepreneurs with another
small business miracle.