Steward Leaders: What Value Proposition Do You Present to Others?

Posted by Matthew Thomas

As we have discussed in a previous post (Non-Profit Leadership: Taxing Non-Profits), many charitable organizations have significant difficulty making the value proposition to their local communities to retain the previously unassailable rights and privileges to all forms of tax exemption. Communities requiring PILOTS (Payments in Lieu of Taxes) of certain non-profit entities believe that the non-profit is creating a greater burden in community services than it is offsetting through its charitable work – the expense of which would otherwise have to be then borne by the community or done without.

matthew-thomas-2The difficulty here is disconnected and incongruent assumptions between the non-profits and their communities as to what their value proposition is. Steward leaders wrestle with how to state their organization’s value proposition, whether they are leaders of a non-profit or a local community struggling with its finances.

As Design Group International CEO Mark Vincent outlines in his Stewardship Manifest (pp. 3 – 4), there are three main ways in which a stewardship value proposition develops, outside of faith-based entities:

  1. Obligation
  2. Philanthropy
  3. Prosperity – which I will take the liberty of re-naming “Investment.”

Obligation occurs when someone owes someone else something. This obligation allows certain benefits, and often avoids certain difficulties, penalties or otherwise undesirable consequences. In the context we are discussing here, the most obvious form of obligation takes the form of taxes imposed by a community on its citizens and businesses. Nevertheless, charitable organizations can also act as though their communities (and by extension, their donors and other stakeholders) owe the charity something for the work they are doing. Any time the conversation begins to revolve around how there would be negative consequences if certain donors, stakeholders or community governments don’t allow some benefit, obligation is at least implied, if not explicit. Obligation often is more out of the avoidance of negative consequences than the enjoyment of certain benefits.

Philanthropy occurs when people are invited to “make the world a better place.” The motivation behind this can be anything from altruism to legacy-building, and anything in between. This is often the motivation when people use the term “civic pride” or “making our community a better place to live”. Philanthropists often will attach restrictions to how their gifts are used, even within the context of a non-profit, for specific projects or purposes. Philanthropy is a value proposition based on legacy, reputation, and the public good.

Investment occurs when people contribute with the expectation of gaining something in return. Whether this is the right to advertize in the playbill for a local theater production, or to gain “intangible religious benefits,” as the IRS so elegantly phrases it, investment is a value proposition offered with the expectation that the donor will benefit personally from involvement.

Being clear on the value proposition steward leaders communicate to their communities, their donors, their clients and themselves will help whenever questions of value – such as in the taxation of non-profits – arise. Each value proposition has its place, and each has varying amounts of power to motivate in its context. Faith-based groups can add yet another value proposition, which we will discuss in a separate post.

What value proposition are you offering to others as a Steward Leader?

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Topics: nonprofit leadership, Value Proposition, Matthew Thomas, Tax-Exempt