Why free stuff isn’t free

GiftI have heard too many times from people in disaster response: “If we can just get the product donated, then we can do…”  If a person or organization is willing to do a program only if it is all provided for free, they are simply stating that the program is not important enough to budget for it.  That attitude minimizes the value of the program and makes me wonder if it was important enough in the first place.  They miss the point on in-kind donations.  An in-kind donation is when someone gives you a something at no financial cost.  But don’t think it is free.  Free stuff is never free.  Everything in a supply and demand economy has a cost.  There are financial, time, resource costs associated with everything.

Let’s look at fictitious non-profit group Acme.  Acme has a mission to bring internet access to disaster survivors.  One of the tools they use is a widget and hundreds of widgets are used each year.  Each widget costs $100 and is produced by Ajax.  There are two ways to get widgets.  Acme can buy the widgets from Ajax using donated money, or Acme can ask Ajax to donate the equipment.  Procuring a widget meets Acme’s need regardless of how the widget is procured.

Acme’s fundraisers are tasked to raise the necessary funds to cover the organization’s annual budget.  As money is brought in to the organization, it is applied to the annual budget.  The money goes to offset the general (or core) expenses including facilities, salaries, program maintenance, daily operations … and the purchase of Ajax widgets.  In general, donors like to see where their money goes to know that they are making a difference.  That is what makes fund raising such a hard task; it is convincing the donor to give money and trust Acme to the right thing without being able to show them a specific thing that their money did.  There is another concept called a “directed donation” where funds are raised for a specific goal.  Directed donations are very commonly seen as capital improvement projects.  I’m leaving directed donations out of this discussion.

Donors are not restricted to just providing cash.  They can provide goods and services; this is an in-kind donation (IKD).  In-kind donations are unique because it should match Acme’s needs with what the donor has to offer.  (Receiving product that isn’t needed becomes wasteful in costs to ship, receive, store and dispose.)  When Acme receives an in-kind donation, it offsets expenses that would be spent otherwise to get the products. For our example of widgets, this is declared as income on Acme’s taxes, and a donation on Ajax’s taxes.  When Ajax decides to donate the widgets to Acme, Ajax is providing a value of products in lieu of a cash donation of the same value.

The end results of any of these actions is the same: Acme has widgets.  It didn’t really matter if the fund-raisers directly courted Ajaz for the widgets or had a third-party donor provide cash to buy the widgets.  The result is budget-neutral: the right amount of cash or products came in to match the same amount of expenses for the product procurement.

Here’s why free stuff isn’t free.  At the start of the year, Acme set forth a financial budget based on expected donations (IKD or cash) and expenses.  The cash value of the widgets that Ajax donated gets applied to the budget and reduces the cash that needs to be raised that year to buy widgets.  Ajax’s donation doesn’t free up Acme’s budgeted amounts to be applied elsewhere; the donation met the business needs of procuring widgets per the budget.  The budget is just a financial tool to manage incoming donations and outgoing expenses regardless if the donation show up as cash or IKD.  A budget is very different from an account balance of real money in the bank.  The hope is the budget, actual expenses and cash in the bank match up during the fiscal period.

In-kind donations often come with additional strings that are not part of a cash procurement.  The donations are usually large enough that the donor wants publicity which will help create an impression of the donor.  Here, Ajax wants to be able to publicize that they donated to Acme which helps create the public impression that Ajax is a good corporate citizen.  Acme and Ajax producing a joint press release to promote the relationship doesn’t take too much time.  But imagine if Ajax’s expectation is for Acme to take a photo and publish a story every time a widget is used.  The cost in Acme’s resources to meet that expectation could exceed the cost of just buying the widgets with cash.

So next time you hear that a project will only be done if product is given for free, ask the question if the product needs to be free or just be budget-neutral for the organization?

Poor communications can even be blamed for the Dark Ages

Communication is vital.  It is the passing of information from one person to another.  This information can be a thought, a request, a need … anything at all.

An interesting though was put forth about communications in a historical show about the Dark Ages in Europe: after the plague and the Viking hordes, there were not enough people left living in Europe near each other to share ideas and spark creativity.  The Renaissance had to wait until the population rebounded to create a density of shared ideas.  Hence, the lack of communication held back the advancement of European civilization after the fall of Rome until the Renaissance.

If there was an after-action report on Europe in the Dark Ages, the blame would have been placed on poor communications. I wonder when that will stop being the centuries-old excuse and AAR’s start to get more fine-tuned at finger pointing to problems.

I’m not trying to sell this product, but if you want to know the show was “The Dark Ages” by the History Channel.

My thoughts on Craig Fugate’s IAEM Keynote

It is always a pleasure to hear Craig Fugate, the FEMA Administrator, talk at conferences.  He has a no nonsense approach that is a breath of fresh air.  Fugate is not afraid to speak his mind and talk openly.  This write up is based on his keynote address at the International Association of Emergency Managers conference in November 2010.  You can view the blow by blow reporting by searching for #IAEM on Twitter.

At the IAEM conference, Craig Fugate made a point that has really stuck with me.  I would tag it as a perspective changer.  It isn’t a radical change that requires a huge effort to agree with, it only requires a person to look at something from another point of view.  Granted it can be easier to move mountains then change some people’s perspectives, and then implementation is a whole other step.

Continue reading My thoughts on Craig Fugate’s IAEM Keynote

Kill career in one simple step: promote them

A toy figure laid flat in from of a crowd of figutedThe best way to kill the career of technology person is to promote them. Seriously, it is that simple. I have both witnessed and experienced what happens when you take a person who is really good at their work, and promote them to manage other people doing that work. Performing a technical task is much different skill set than managing people. Developing technical people to change their career field from technical to management is a transition that takes time and investment to be successful.

Continue reading Kill career in one simple step: promote them

Bandanas and earrings: My memories of Sept 11, 2001

Camp Unity loglI have the utmost respect for the people in New York who worked in and responded to the towers. For the people near the Pennsylvanian field. For the people who were saved, and for the people who tragically lost their lives. I remember that 9/11 ended horrifically for many people in three locations, and the people who knew and loved them are all over the country and around the globe. For me, my memories of 9/11 is the Pentagon.

As write, it is late at night on September 11, 2009. I’ve been thinking on and off today about where was eight years ago. I passed someone in the hallway at work and she said “happy anniversary, we met eight year ago today.” Another friend reflected to eight years ago on Facebook and my simple comment back was “bandanas and earrings 🙂 .” I hear other people’s stories about their experiences and many center around watching TV for days and weeks straight. I didn’t watch much TV during September, and I didn’t see the constant replay of the tragedy. I believe am lucky in that respect. I don’t consider my experience of September 2001 special, yet do feel I’m one of small cadre of people with perspective different than most. I spent the day of September 11, 2001 in the Arlington County Emergency Operations Center. Then spent the rest of September’s nights at location that became known as Camp Unity until the response and recovery phase was completed and the American Red Cross left the Pentagon parking lot.

Continue reading Bandanas and earrings: My memories of Sept 11, 2001

My two-cents.

Two CentsWhen people resort to the tactics of racial slurs, spitting, fear-mongering, vandalism, terrorism and violence; those actions validate the weakness of their integrity and argument, as well as baring their selfishness and ignorance.  Actions of few like this dilute the positive work of others — especially when it appears on the surface they have the same end goal.

And this applies across many situations.

Why should Keith blog?

Blog“Blogs, tweets, spaces, pages, books, oh my.  There are so many voices that create so much noise, why on Earth do I think anyone would be interested in reading my blog?” I said to myself.  I believe that I’m in fairly niche role, one that has some fundamental differences to similar roles and yet other differences are splitting hairs.  When someone asks me what do, I’ve got it down to single, run-on sentence: I’m responsible for all the technology the American Red Cross deploys to large-scale disasters – between 50 and 70 per year where each lasts from two to four weeks.  My team and are unique convergence of emergency response management, technical mobility, infrastructure stability and the critical interface between people and technology.  Honestly, you probably think that I’m playing buzz word bingo with that statement so let me break it down. Continue reading Why should Keith blog?

Disaster Response relative to Corporate Continuity’

I believe there is fundamental difference in having business continuity of operations plan (COOP) versus the capacity to respond to disaster. COOP is to regenerate part of the business that was operational prior to the disaster so the business can function again. Deploying technology to disaster is setting up an entirely new site where there was nothing prior and the technology is not regenerating anything. disaster recovery planner should not be assumed to have the same skill set as person who deploys technology in disaster, and vice versa <!–more–>\\\\nA disaster recovery planner is looking to prioritize the service restorations of the technical infrastructure — in conjunction with senior leadership — and should set expectations on what will come up first. They may also have varying degrees of replication and duplication both physically and logically to mitigate the impact and expedite the recovery. Corporate continuity planning may also have the luxury of preplanning alternative locations, establishing agreements, staging equipment and developing personnel structures. The challenges are the politics: How to prove relevance to be on leadership’s radar and get their attention. How to show value to the organization at budget time despite not being used. \\\\nResponding to disaster with technology is different from this. The primary systems, servers and networks are still in place and fully functional. The goal is to stretch the connectivity to new location so people can communicate through voice and data mediums. The challenges are the fundamentals: technology needs shelter; safe place that it can function. It needs sufficient electrical power so that it can operate. And clean power too; few things will kill power supply or UPS like construction grade generator. circular saw doesn’t care how dirty the power is but electrical equipment is very finicky. During disaster, location with the basics can be difficult to find let alone identify ahead of time without knowing the disaster’s actual impact. There is also competition for these places. FEMA is looking for it. State government is looking for it. Other NGOs are heading that way too. The landlords know this and some will quickly dismiss charitable feelings when they believe large entity is coming who will pay top dollar for the space The perspective from inside an organization that does both of these is very interesting indeed. On one side are corporate COOP planners who are following the established best practices. On the other side are people that say “but, umm, we do this every day.” Here lies the rub and misconceptions. If the corporate planners rely too heavily on the disaster responders, they’ll fall short. If there is an event that causes the corporation to COOP, then there it is also likely that there is disaster that needs to be responded to. The mission of disaster response will take the priority for that team and away from the needs of the corporation leaving the corporate planners standing alone. On the flip side, if the disaster responders are not open and willing to share resources, then the organization will excessively spend resources to build separate yet outwardly similar caches of equipment. If the disaster responders do not take the corporate planners and COOP seriously, then the systems they assume will be there that allow them to respond may not be. person cannot extend network into disaster zone when the core of the network isn’t functioning There is something to be learned from both business continuity planners and disaster responders when it comes to effectively preparing business to withstand an incident. They are not that similar and they are not that different. It will require an open dialog where each side can acknowledge the other’s strengths and their own weaknesses <em>As parting acknowledgement or caveat, I’ve completely focused on the technology aspect here. There is just one facet of both COOP and disaster response which also needs to account for business mission, people, and other moving parts.</em>