“Never, ever, think about something else when you should be thinking about the power of incentives.”

— Charlie Munger, investor, author, philanthropist and Warren Buffet’s irreverent partner at Berhshire Hathaway.

In my post on the future of “full service” agenciesI urged that we all give serious thought to re-directing the financial incentives to reward innovation, growth and value.

For example, “meeting last year’s numbers” should be a reason for termination, not reward. Yet, the conventional payment system for agencies and consultants is to put in the time, organize plenty of meetings, not rock the boat, and get paid.

Well, what’s good for the goose is good for the gander. This week we’re urging nonprofits to look in the mirror.  To take a close look at the internal incentives at work inside their organization and in the relationships they have with their vendors.

In most cases these incentives go unrecognized.  And often they’re doing significant damage.

No, I’m not talking about “incentives” as in address labels, tote bags plush toys, calendars or other goodies that in the trade are generally known as “premiums” or “freemiums.”

Rather, we’ll focus on those seldom-recognized incentives inside nonprofits.  Forces that when recognized and properly tapped can unleash significant growth and value in fundraising programs and significantly brighten an organization’s future.

We’ll also shine the spotlight on the flip side of the incentive coin—disincentives.  Those oft-ignored factors at play in all too many nonprofits. Frequently, masked as “incentives” these disincentive bandits sap energy, money, growth and unnecessarily drive donors to the exit.

Hopefully, this week’s posts will stimulate and lead you to a more structured and thorough understanding of some of the internal shape an organization’s actions and its future.

Understanding how your short-term incentives may differ from the long-term goals of the organization

Here—from a range of potential topic—is the list we’ll cover this week.

• How the incentive to please your boss and meet this year’s goals may be undermining your organization’s future.

• Dangerous incentives at work in the siloed organization where the direct mail folks compete with the online folks, and the event folks and major gift folks don’t want to have anything to do with anyone.

• Beware the mismatched incentives between you and your commercial partners be they face-to-face canvassers, list brokers, or telemarketing firms.

• Just who benefits from “volume” and understand why the “volume” incentive is a poor/dangerous substitute for incenting consultants/vendors/staff on “value”

• Competition among channel managers is often a problem. We’ll offer a modest proposal aimed at a solution.

Have a good week and stay alert to how obvious or sometimes hidden incentives may be helping or harming your organization.

Roger