BeInkandescent

JANUARY 2011 ENTREPRENEURS OF THE MONTH

By Hope Katz Gibbs

What does the future look like at three of America’s largest nonprofit organizations? Below you’ll read remarks from Mark Tercek, CEO, The Nature Conservancy; Terri Lee Freeman, president, The Community Foundation for the National Capital Region; and Wayne Pacelle, CEO, The Humane Society of the U.S.

The nonprofit execs were panelists at the 2011 Nonprofit CEO Outlook forum hosted by Bisnow on December 16 at the Woolly Mammoth Theatre in DC. The moderator was Richard Newman from the law firm Arent Fox, which sponsored the event.

They admitted that they have their work cut out for them this year, and for the foreseeable future. In addition to facing new complicated compliance and governance issues, the upcoming crop of donors (Generation Y, also known as the Millennials) is taking a different look at how they contribute their time and money. This, plus the flagging economy, is placing increasing demands on their organizations.

What’s the solution? From direct-mail campaigns, to social media outreach, education programs, and giving circles, the leaders say they are doing everything possible to encourage active donors to continue to open their hearts and pocketbooks, as they reach out to new donors — and avoid “mission drift.”

Following are excerpts from their conversation.

The Nature Conservancy’s CEO Mark Tercek was a managing director at Goldman Sachs, where he helped develop its environmental strategy before taking over the largest environmental nonprofit in 2008.

While his experiences give him an interesting perspective on the for-profit and nonprofit world, one of the biggest obstacles his organization faces is cuts in state budgets.

“They are making it difficult for The Nature Conservancy to operate one of its most lucrative services, the conservation buyer project,” he said, explaining that in recent years, The Nature Conservancy has bought land in critical conservation areas (including land that buffers and surrounds core natural areas), placed conservation easements on the land, and then resold the restricted property. “The government trend has been to match the money we raise, but that is dwindling. As a result, there is increasing pressure on us to raise funds through private donors.”

Partnering with big businesses is appealing, he said, even if some of those corporations have questionable environmental practices. For example, The Nature Conservancy works closely with BP, which is a member of its International Leadership Council and has been a major contributor to a project aimed at protecting Bolivian forests. BP also gave the organization 655 acres in York County, Va. And in Colorado and Wyoming, The Nature Conservancy has worked with BP to limit environmental damage from natural gas drilling.

“So long as you establish clear guidelines and make sure all of your work together is transparent, there isn’t a problem,” Tercek explained in December, reinforcing the comments he made in the days following the BP oil spill in the Gulf of Mexico to The Washington Post when he said: “Anyone serious about doing conservation in this region must engage these companies, so they are not just part of the problem, but so they can be part of the effort to restore this incredible ecosystem.”

Although his viewpoint may be somewhat controversial, Tercek says that the thing that keeps him up at night is his concern that Americans are increasingly disconnected from nature. “It has been well-documented that kids today don’t venture into the woods nearly as much as our generation did,” he told the Bisnow audience. “If an entire generation is disconnected from nature, how will they feel connected enough to it to want to protect it?”

Read the advice Tercek has for other business leaders in our January 2011 Tips for Entrepreneurs column.

Terri Lee Freeman has been president of The Community Foundation for the National Capital Region since July 1996. She has led the growth of the largest funder of local nonprofit organizations in the metropolitan Washington region from $52 million to more than $350 million in assets.

In late 2008, Freeman launched the Neighbors in Need Fund to help other organizations that provide the basics — food, clothing, and shelter — to thousands of families and individuals across the region. It is the largest fund of its type in the region, and one of the largest in the country.

With fewer people opening their pocketbooks due to the impact of the recession, Freeman’s organization and two of its nonprofit partners, the Center for Nonprofit Advancement and the Nonprofit Roundtable of Washington, launched a “Think Twice Before You Slice” campaign — a clever phrase to encourage donors to stop before they cut funds that help the needy.

She realizes however, that she needs to dig even deeper to keep funds rolling in. “As the heat gets hotter with budget cuts, we’re going to have to find ways to leverage the local donor base. Younger people, older people — everyone who cares about the underprivileged needs to be engaged.”

The most important approach for a nonprofit today, she added, is the ability to show tangible results. “Donors want to know that if they are going to give you their money, you are going to make a difference with it. Nonprofits have had to sharpen their reporting skills, and I think that’s a positive development.”

Wayne Pacelle, CEO of The Humane Society of the United States, took over in 2004 after serving for nearly 10 years as the organization’s chief lobbyist and spokesperson. Since then, he has helped it become the nation’s largest animal-protection group in the United States, with a reported 11 million members, annual revenue of $135 million, and $200 million in assets.

He attributes the growth in part to successful mergers with other animal-protection organizations. Like The Nature Conservancy’s Tercek, Pacelle believes that it is important to band together with people and organizations — even when they don’t appear to share your mission.

Case in point: Last month, Pacelle announced that he believes Michael Vick, the Philadelphia Eagles quarterback who served prison time for his role in a deadly dog-fighting operation, should eventually have the opportunity to bring a dog home.

“What he did is terrible, there’s no question about that,” Pacelle told CNN last month. “But this is an issue of protecting animals in the future. Endlessly flogging Michael Vick is not going to save one animal. But putting him to work in communities to save animals and educate people about the problem of dog fighting — especially with at-risk kids — is the way to help the problem.”

The key to running a successful organization, he insists, is putting aside differences so you can accomplish something bigger than yourself. So what keeps Pacelle up at night? “I am increasingly worried about the dramatic partisanship that currently divides our country. If we don’t find a way to make amends and stand on solid ground, we won’t be able to solve the bigger issues of conservation, animal protection, and poverty.”

Click here for Tips for Entrepreneurs from the Nature Conservancy’s Mark Tercek.

By Hope Katz Gibbs
Publisher & Editor
Be Inkandescent Magazine

Mark Tercek likes to be out in nature. Even when he was the managing director at Goldman Sachs, he played a key role in developing the firm’s environmental strategy. So when he heard about the opening at The Nature Conservancy, he applied.

“I figured it was a long shot, but I wanted to throw my hat in,” he told Be Inkandescent Magazine in an interview after the December 16 Bisnow event. “When I got the job I felt like I’d won the lottery.”

Merging his past and present

Tercek admits to being optimistic, but says we shouldn’t confuse that with being what he calls a “Pollyanna.”

With his Wall Street roots firmly planted in reality, he believes that there is a lot the nonprofit world can learn from its for-profit counterparts — such as maximizing their returns, holding people accountable, and investing in the leadership development of their staff members.

“When I got to The Nature Conservancy, I was used to having staff members participate in regular education and training programs,” he explains. “When I suggested that, my team initially said that they didn’t think there was money to support that effort. I disagreed. Investing in your staff is incredibly important because they are one of your biggest assets — especially at a nonprofit where re-training is expensive. Keeping people growing and engaged is essential.”

He admits, too, that nonprofit organizations have a leg up in several areas.

“Because nonprofits are always having to raise money, many are very disciplined about what they spend,” he says. “Fewer resources also require them to do a good job inspiring people internally and externally.”

Education is a top priority for Tercek.

Because Tercek is worried that not enough young people are spending time in nature, he has put a program in place to combat the trend.

In the last several years, The Nature Conservancy has partnered with the Toyota USA Foundation to expand its LEAF program (Leaders in Environmental Action for the Future), a comprehensive, environmental leadership program for teenagers and their educators.

Students from the inner city, among others, are being encouraged to become “the next wave of environmental leaders,” through the program that combines enriched environmental curriculum in high school classrooms with paid residential summer jobs for students on Conservancy preserves.

In 2009, a pilot program had eight students spend the summer in the Uplands Farm Preserve in Cold Spring Harbor on Long Island. They monitored preserves, maintained trails, replaced signage, mowed grass, restocked shellfish, restored native plants, and monitored birds.

Last summer, the program supported 10 environmental schools in the New York metro area. In the coming years, Tercek hopes to engage more than 30 environmental high schools in urban areas across the country, ultimately serving more than 20,000 students.

“Today’s youth are more urban, more diverse, and more technologically advanced than any generation in history,” Tercek explains. “They are also more disconnected from nature than any previous generation. What we do today to engage a diverse array of young people in our work will ensure our conservation success in the future.”

Navigating the future

Tercek says that he believes that for nonprofits to continue to be successful in the future, there needs to be a better “charity navigator.”

“It’s important for donors to know how to pick which nonprofits to work with,” he says, including properly assessing the amount of money that the organization spends on overhead and staff. It’s important that we have enough people operate the organization. By simply saying that the overhead ratio is low does not indicate that the nonprofit is doing a good job accomplishing its mission.”

Leadership tips for entrepreneurs

Tercek outlined three areas that he believes are essential for leaders to be effective.

1. Put the right people in the right jobs. “Ask yourself: Are all of my employees doing their jobs well? If not, find ways to help them do their jobs better. If you focus on your employees and make sure they are well-trained, motivated, and happy, that investment will be your greatest asset,” he says.

2. Know what your mission is, and stick to it. “This clarity of vision and goals will keep you focused. Don’t spread yourself too thin or your results will suffer.”

3. Look ahead. Don’t get complacent about your current accomplishments. Always have an eye on the future, and stay on top of the trends.

About Mark Tercek

Before joining The Nature Conservancy in 2008, Mark Tercek was a managing director at Goldman Sachs, where he played a key role in developing the firm’s environmental strategy. He headed the firm’s Environmental Strategy Group and Center for Environmental Markets, which worked to develop and promote market-based solutions to environmental challenges.

Mark also headed various business units at the firm, including Corporate Finance, Equity Capital Markets, Consumer/Healthcare and Leadership Development. He joined Goldman Sachs in 1984 and was named a partner in 1996.

Since joining The Nature Conservancy in 2008, Mark has served as a member of the Commission on Climate and Tropical Forests and the Council on Foreign Relations Climate Change Task Force. He was a contributing author to the book Carbon Finance: Investing in Forests and Land for Climate Protection, published in 2009 by the Yale Center for Business and the Environment.

Mark is a member of many boards and councils, including “Resources for the Future.” In 2010, Mark was appointed by U.S. Secretary of Energy Steven Chu to serve on the National Petroleum Council, through which he will provide advice, information and recommendations to Secretary Chu on environmental issues related to oil and natural gas.

Mark earned an M.B.A. from Harvard in 1984 and a B.A. from Williams College in 1979.

For more information, watch Tercek’s YouTube video to see what he had to say about the Gulf Oil Spill. And click here to learn more about The Nature Conservancy.