October brought some great discussions in the blogosphere, including a forum on whether regulations around donor advised funds should change, concerns that we are working too hard, the need to better retain donors, and a debate about whether social media is (or can be) an effective fundraising tool. Round that out with examples of successful crowdfunding and volunteer skill crowdsourcing, and it was a good month.
Below are my picks of the 10 best reads in the world of social change in October. But, as always, let me know what I missed. And if you want a longer list, follow me on Twitter, LinkedIn, Facebook or Google+.
And if you want to see past 10 Great Reads lists go here.
- Donor advised funds (DAFs) have come under fire in recent years. There was an interesting discussion in October at the Boston College Law School Forum on Philanthropy and the Public Good about whether regulations on donor advised funds should be changed. In advance of that forum, history professor Lila Corwin Berman provided an historic perspective (on the HistPhil blog) including the fact that “donor advised funds fundamentally changed the balance of public and private power in the United States starting in the 1970s.”
- John Hopkins University professor Lester M. Salamon released a new book in October, The Resilient Sector Revisited: The New Challenge to Nonprofit America in which he lays out a framework for understanding America’s nonprofit sector. An excerpt from the book in the Nonprofit Quarterly examines “The 4 Impulses of Nonprofits“, as he describes it: “The nonprofit sector has long been the hidden subcontinent on the social landscape of American life, regularly revered but rarely seriously scrutinized or understood.” His book is an attempt to do just that.
- The Association of Fundraising Professionals and the Urban Institute released their annual Fundraising Effectiveness Survey Report with some startling data, like: nonprofits retained only 43% of their donors in 2014, and for every $100 a nonprofit brought in they lost $95 to lapsed and reduced gifts. So the challenge for nonprofits, says AFP president Andrew Watt, is to get better at retaining donors: “Donors do not simply choose a few charities to support and stick with them every year. Donors are remarkably inconsistent in their giving, whether it’s because they lost interest in a cause, were giving because a friend or family member asked them, or did not like how the charity was treating them. The charitable sector’s challenge is to figure out how to better inspire and retain donors from year to year.”
- And speaking of fundraising, Nonprofit Tech for Good donated $800 to 32 nonprofit organizations via the nonprofit websites and shared some important lessons for other nonprofits trying to fundraising effectively online. But Derrick Feldmann cautions that social media fundraising is not the panacea many board members might think. The new “Social Good Team” at Facebook might disagree because they have big plans for social media and the nonprofit sector.
- Kickstarter, the crowdfunding website, re-incorporated as a public benefit corporation in order to put their social good mission above profit, and then partnered with the United Nations to raise money for Syrian refugees.
- While we’re on the power of the crowd, in his ongoing Fixes blog, David Bornstein profiles Movement.org, a crowdsourcing site that connects human right activists and skilled volunteers. As David Keyes, one of the leaders, describes the platform: “Amazon says that you don’t need to be a bookstore to sell a book and Uber says that you don’t need to be a taxi service to drive a taxi. I realized that you don’t need to be an N.G.O. to fight a dictator, or a political leader to help a human-rights activist. Millions of people around the globe have the skills to help, and they’re currently not being utilized. If we could build a bridge between these communities, more people could be helped than we ever thought possible.”
- And in more solutions news, South Los Angeles, once an urban food wasteland, is becoming a hub of food activism with a focus on startup, affordable eateries that are committed to building a strong, healthy community.
- Companies are already getting ready for the holiday season mix of commercialism and philanthropy and Amy Schiller worries that Bloomingdale’s “Icons w/ Impact” marketing campaign highlighting celebrities, fashion and philanthropy is a worrisome shift in philanthropy. But I’m hoping that the HistPhil blog will chime in with a reasoned, historical perspective.
- Poor strategy will get you in the end. The breast cancer nonprofit, the Susan G. Komen Foundation came under fire a few years ago for some poor strategic decisions (like aligning with Kentucky Fried Chicken and pulling funding from Planned Parenthood), and it looks like those decisions have dramatically affected their fundraising.
- Phil Buchanan from the Center for Effective Philanthropy has a problem with our workaholic culture. He and his organization have learned from the Millennial generation’s more balanced (than Gen X’s or the Boomer’s) approach to work and life, and he suggests we do the same: “The millennials don’t care that this is what we might have done at that stage of our careers. In fact, they look at us and are quite clear they don’t want to be us — they don’t want to make the same mistakes!” Amen!
Photo Credit: Museum of History and Industry, Seattle
In today’s Social Velocity interview I’m talking with Tim Delaney, President and CEO of the National Council of Nonprofits, the nation’s largest network of nonprofits.
The National Council of Nonprofits helps nonprofits identify emerging trends, engage in critical policy issues, exchange proven practices across state lines, and advance their missions through advocacy. Previously, Tim served as a partner at a large law firm (helping prosecute the impeachment of a Governor and leading the firm’s government relations practice), Solicitor General and then Chief Deputy Attorney General (leading his state to win several cases in the U.S. Supreme Court), and founder of the Center for Leadership, Ethics & Public Service (championing ethical leadership and civic engagement).
You can read interviews with other social change leaders here.
Nell: Historically, “advocacy” has been a dirty word in the nonprofit sector. Organizations have been afraid of getting into trouble with the IRS for pursuing too much lobbying behavior. But that seems to be changing. What are your thoughts on how involved in advocacy 501(c)(3) organizations can and should be?
Tim: Yes, it’s perplexing that using words like “advocacy” and “lobbying” could get a nonprofit employee’s mouth washed out with soap. But seriously, advocacy is not just a right for nonprofits that is protected by the First Amendment; it’s a profound responsibility and effective tool to advance nonprofit missions.
Nonprofits provide a way for Americans to come together to solve problems, large and small. And they often do so through advocacy: simply standing up and speaking out for something they believe. Americans came together through nonprofits to advocate successfully in securing the right of women to vote (via suffragist groups), establishing Social Security (spearheaded by Townsend Clubs), desegregating schools (leadership by NAACP), securing civil rights (Dr. King delivered his “I Have a Dream” speech and undertook much of his work as President of the nonprofit Southern Christian Leadership Conference), and so much more.
But advocacy is not just for social movements. Advocacy includes standing up for your nonprofit’s right to be paid reasonably for services it provides under a government contract. Advocacy includes telling the story of your nonprofit’s impact to a reporter. We see advocacy as the answer to one key question: who can I talk to today to advance my nonprofit’s mission?
A barrier many nonprofits run into comes from what I call the “3 As” –uninformed academics, accountants, and attorneys who advise nonprofit boards by passing along false lore that there “might be legal problems” if a nonprofit does “too much” lobbying. Nonprofit staff come back from advocacy training fired up, but boards extinguish that passion based on false lore. After hearing stories like this from across the country, we’ve decided to turn advocacy training around. The traditional approach of “it’s legal” sought to counter the false lore, yet too often it led people to focus on arcane issues more remote than the fine print on your airline ticket or apps that you never read. Therefore, we now focus on “why” advocacy is essential to mission advancement and “why” nonprofits need to be engaged at the state level to protect against government attacks on tax exemptions, nonprofit independence, and charitable giving incentives.
As part of our effort to get nonprofits past those old barriers, we’ve joined together with Alliance for Justice, BoardSource, Campion Foundation, the Forum of Regional Associations of Grantmakers, and Knight Foundation to create Stand for Your Mission, a free website that provides nonprofit board members with information they need to be effective advocates in advancing nonprofit missions.
Nell: The National Council of Nonprofits has been on the forefront of the movement to get government to recognize the importance of funding nonprofits’ indirect costs. The recent OMB ruling mandating a minimum 10% indirect rate on most government grants and contracts with nonprofits seems like a watershed moment, but 10% is still pretty low and many nonprofits don’t understand the implications or how to benefit. What are your plans at the Council of Nonprofits to continue to move this issue forward?
Tim: As you noted, the 10% of modified total direct costs is just the minimum. For tens of thousands of nonprofits, just getting to 10% will make a huge difference. In its most recent State of the Sector Survey, Nonprofit Finance Fund found that 57% of nonprofits are being paid indirect cost rates of 9% or less. And Urban Institute found that of nonprofits reporting a problem, a quarter said that governments were paying them zero for indirect costs.
Now compare those paltry sums against research from Bridgespan showing that a more accurate range is about 25 to 35%. Certainly each case is different, but being reimbursed nothing or just 5% year after year when your real legitimate costs are always higher is debilitating, eroding effectiveness. Delivering sustained impact is impossible. So getting those nonprofits up to just the minimum will enhance sustainability to make a difference in their communities.
Importantly, 10% is just the floor. If a nonprofit is properly allocating costs and documenting its indirect costs, it can receive reimbursement for whatever those costs are, whether they are 20, 30, or even 40%. Getting paid for the true costs of delivering services can reduce burdens on nonprofits to fundraise for the difference, which frees funders from having to subsidize governments and allows nonprofits to dedicate more time to missions instead of diverted to filling funding gaps.
Seeing the OMB Uniform Guidance go into effect is just the beginning and underscores the importance of nonprofit advocacy. The mere issuance of OMB’s mandate doesn’t mean that the tens of thousands of local, state, and federal employees scattered across multiple departments, agencies, divisions, and offices will follow it or apply it properly. First, they need to become aware of it (which still has not happened), then receive training (same), and apply it consistently (same). Plus, states and localities often have contrary laws and policies on their books, requiring advocacy to change them to conform. OMB’s mandate involves a giant systems change, but the federal government still has not informed the system of what is required and the need to change policies and practices to abide by it.
David Thompson and Beth Bowsky on our team have been conducting dozens of in-person presentations and webinars across the country to ensure nonprofits are aware of their rights and how to advocate for proper implementation of the Uniform Guidance. Plus, we have been working with multiple state and local government associations to spread the word, and written numerous published pieces, including an overview, “Know Your Rights … and How to Protect Them,” that highlights potential compliance challenges.
In addition, we’re creating a series of short training modules for nonprofits to better understand their indirect costs. The key is for nonprofits with government grants and contracts to stand up for their rights to fair indirect cost reimbursement and to let their local state association of nonprofits and us know when governments are not living up to their obligations. Working through our network gives a nonprofit cover (so it isn’t fighting alone and having to worry about backlash) and strength in numbers to protect those rights.
Nell: This issue is also part of the larger movement to overcome the Overhead Myth in the nonprofit sector, the idea that “overhead” (or indirect costs) are bad and should be limited as much as possible. How close are we to truly overcoming this myth both among nonprofit donors and nonprofit leaders (who often keep themselves in these handcuffs)?
Tim: We still have a long way to go. OMB’s Uniform Guidance is a huge step forward because the federal government has now expressly acknowledged that indirect costs are legitimate and necessary. The sector needed a powerful external validating voice to overcome decades of treating mythology as orthodoxy. It’s inspiring to see that many private grantmakers have now adjusted their own policies or started to re-examine their past policies that unfairly limit payment for indirect/overhead costs.
However, the anti-overhead culture is deep seated and will take a long time to root it out. That’s true on both the funding side and the nonprofit side, given the powerful disincentives against claiming full costs. Nonprofits were forced to keep overhead artificially low by underinvesting in their infrastructure, staff training, and many other necessary expenses. Until we get so-called “watchdog” groups and reporters to stop using overhead ratios as false proxies for nonprofit efficiency (and get them to stop reporting overhead ratios as if they are a problem), and until all nonprofits are communicating with donors about their impact and what it truly costs to deliver that impact, everyone will still have work to do.
Nell: In both of these areas (advocacy and overhead) and in many others, nonprofits are treated like a second-class citizen. How do we get to a place where the critical role nonprofits play in our economy and in solutions to social challenges is recognized, and nonprofits are fully supported with the tools they need to be successful?
Tim: First and foremost, nonprofits must embrace our role as the place Americans come to solve problems and resolutely assert our role as advocates for the people and our communities. We often are on the front-line of vexing social challenges, giving us front-row seats to see the problems and the solutions. Who are we to hoard knowledge of solutions that could help our fellow neighbors? With the knowledge we hold and the clout we have (10% of the American workforce), we deserve a seat at policymaking tables. We need to proudly stand up, step forward, claim our space, and speak out for government to leverage its resources to solve problems at their source.
We need to tell the full story, not just of how many people were fed or acres preserved, but also the economic impact of the sector as a whole. For instance, CalNonprofits (the state association of nonprofits in California) published Causes Count about the economic clout of California’s nonprofits, and Donors Forum (the state association of nonprofits and grantmakers based in Illinois) released research on Social Return on Investment, showing the economic and social value of dollars invested in nonprofits.
As for being “fully” supported, that’s much more difficult. According to Nonprofit Finance Fund, last year – for the second year in a row – a majority of nonprofits didn’t have the resources to meet demand for their services. That’s going to be tough to turn around, especially as many nonprofits continue to be sliced by government budget cuts. Even as studies boast that individual giving is getting back to pre-Recession levels, that doesn’t make as much of a difference as most people think. Despite the focus on individual giving, it makes up only 9.3% of the sector’s overall revenue. Foundations are an even smaller percentage: 1.9%. Government grants and contracts make up a much larger portion – 32.3% – of the sector’s revenues. That’s why our focus in this area is so important.
Photo Credit: National Council of Nonprofits
It is (almost) Halloween again, so it’s time for my annual Monster List. I’m posting early this year because I’m gearing up for the Independent Sector conference at the end of this month. While past Monster Lists have focused on social change books, or conferences, or tools (you can also see lists from 2014, 2013, 2012, and 2011), today’s list is about social change blogs (and online sites and social streams).
There are some incredible ones out there. Some have phenomenal long-form thought pieces, some have a really unique perspective, some are really cantankerous (I love that!), and some aren’t even blogs, but rather online aggregators or forums. Some post daily and some only post once a month or once a quarter.
But what they all have in common is that they will really make you think.
As with all of my Monster Lists, not everything on the list is directly related to social change. Rather, everything on the list has something to offer social change leaders, whether that was the creator’s original intent or not. I firmly believe that we have to get outside our normal walls and normal haunts in order to be inspired, find new solutions, and see things differently. I regularly check the places on this list because I think they have something unique and important to say. And they each help to move my own thinking and writing forward.
But I know there are many more places out there, so please add your favorites to the list in the comments.
- Beth’s Blog
- Blue Avocado
- Brain Pickings
- The Center for Effective Philanthropy Blog
- Chronicle of Philanthropy
- Cynthia Gibson’s aggregated article lists (@cingib)
- The F.B. Heron Foundation’s Pulse Blog
- Forbes Philanthropy
- Full Contact Philanthropy
- Inside Philanthropy
- Markets for Good
- National Council of Nonprofit’s Opinion
- Nonprofit Quarterly
- Nonprofit Tech for Good
- Nonprofits Assistance Fund
- Nonprofit With Balls
- NPR History Dept
- Pew Research Center
- Philanthropy 2173
- Social Currency Blog
- Stanford Social Innovation Review
- Steven Pressfield Online
- White Courtesy Telephone
- Work In Progress: The Hewlett Foundation Blog
Photo Credit: Fred Gwynne and Yvonne DeCarlo in The Munsters 1964 by CBS Television
Later this month I will be heading to Miami for the annual Independent Sector conference. I haven’t been to this conference before, so it’ll be new for me. And I’m excited about it for a number of reasons.
First, former CEO of Independent Sector Diana Aviv spent the last six months on a “listening tour” talking to nonprofit leaders around the country to get a sense of the trends and challenges they face. She recently announced her departure from Independent Sector to lead Feeding America. This will be her last chance to report on what she’s learned and where the sector should focus moving forward. She’s gathered the data, and she’s on her way out, so I imagine she will have lots of interesting things to say.
Because of Aviv’s listening tour, Independent Sector has organized this year’s conference around six key trends she found shaping the sector: 1) Disruption from inequality and environmental degradation, 2) Greater ethnic diversity and new generations of leadership, 3)Technology transforming learning, gathering, and associations, 4)Swarms of individuals connecting with institutions, 5)Business becoming increasingly engaged in social and environmental issues, 6)New models for social welfare and social change.
Beyond these trends, I’m also excited about the conference because it will be one of the first large, national discussions about the Performance Imperative. Launched by the Leap Ambassadors earlier this year, this new definition of a high-performing nonprofit has certainly been shared and discussed widely (including on this blog), but this is one of the largest presentations of the PI among so many nonprofit and philanthropy leaders. It will be interesting to hear what they have to say about it.
The schedule also includes some fascinating breakout sessions, like the one where Hewlett Foundation’s Daniel Stid and GuideStar’s Jacob Harold will discuss nonprofit cost structures and why we need to Pay What It Takes to Get Results. Amen! And philanthropic visionary, Lucy Bernolz’s Future of Philanthropy session should be eye opening.
Finally, this conference will be an incredibly impressive gathering of 1,000+ thought leaders and social changemakers. There are so many people on the attendees list that I’d love to meet. Perhaps I can convince a few of them to participate in a future Social Velocity blog interview.
So that’s where I’ll be the last week in October. If you can’t make it, you can view the livestream here, or follow the Twitter stream #ISEmbarks2015. I’ll be Tweeting and blogging from the conference, as time allows. If you are planning to be there, let me know, I’d love to see you!
Photo Credit: Independent Sector
Predictably, my post last week arguing that nonprofit events aren’t efficient fundraisers caused some controversy. In particular, fundraising consultant, Gayle Gifford and I had an interesting (and very polite) debate about the post.
The exchange with Gayle really made me think and further refine my argument (which is really the point of debate, right?). What our exchange made me realize is that my issue with nonprofit fundraising events goes far beyond my belief that they are inefficient fundraisers.
Rather, my distaste for events stems from the fact that they often perpetuate the charity mindset, a destructive approach that keeps the work of social change sidelined and impoverished. The world is changing rapidly and the “charity” model doesn’t work anymore. And in fact, that model holds nonprofits back from becoming more efficient, more sustainable social change machines.
In our debate, Gayle and I discussed how events are merely a symptom of larger changes happening in the economy. As I wrote, nonprofit events are part of a:
“dying mentality that “charity” lives beside,…instead of fully integrated into, the economy. I believe that we are moving to a place where the work of social change (historically the work of “charity”) is fully integrated into the rest of the economy…the work of social change is just as important as the work of making widgets or the work of building roads and everyone understands that in order for all of it to work well, we need to finance it effectively.”
And Gayle argued that what I am describing would be a significant change to the world as we know it:
“I too long for/ and am working for the day when social justice is integrated into our economy as well as our philanthropic life… though that’s going to take some pretty massive restructuring of an economy based on unlimited resource extraction and consumption. But I still hold out that hope.”
But, as I responded, I think that kind of massive restructuring is already well underway:
I agree with you that fully integrating social change into our economy is not going to be quick or easy, but the truth is that it is already happening. There is a real convergence of the nonprofit, for-profit and government sectors and the result is that social change is now rather ubiquitous. At the same time, technology and the ways in which we communicate are changing rapidly as well. Add to that a Millennial generation that bakes social change into everything they do, and I think you start to see the beginnings of the “pretty massive restructuring” you and I are talking about. Nonprofits need to do the analysis and abandon activities that just aren’t effective. And then they need to look to some of these structural changes we are witnessing to find more efficient ways to create a sustainable financial model for their social change work.
In my mind, nonprofit fundraising events are anathema because they are symptom of a larger, ineffective way of thinking about nonprofits and the work of social change. Fundraising events are typically run as an aside, a tangential activity that sucks time and money out of a nonprofit and begs otherwise uninterested participants to pay the price of admission. These events keep charity squarely separate from the “real” work of the world.
And I truly believe we have moved past that. There are just too many social challenges to think that benevolent, reciprocity-based “charity” will work anymore. Social change must be bigger, more effective, and more efficiently financed.
When we stop thinking of the work of social change as “charity” supported in part by inefficient, occasional parties, we start creating real investment, real attention, and real change.
Photo Credit: Gerald Ford Library
Since I was out of the office for a good chunk of July and August, I’ve decided to combine both months into one 10 Great Reads list. But let me be clear, there was still lots going on, I just happened to be (somewhat blissfully) missing it.
From philanthropy’s role in inequality, to climate change preparation, to what the Greek financial crisis teaches us about networks, to civic engagement, to digital’s effect on fundraising, to social impact bond results and pizza on the family farm, they were a great couple of months.
In my (limited) view, below are my 10 favorite reads from the past two months. But because I know I missed things, please add to the list in the comments.
- President of the Ford Foundation Darren Walker made a lot of news this summer, from his announcement of Ford’s shift to focusing on inequality and unrestricted grants, to his July release of a thought-provoking essay in which he took foundations to task. He argued that foundations have been “cutting the pie into smaller slices,” and he instead encouraged funders to embrace “a new era of capacity building investment.” Because, as he put it, “What civil society needs most, and now more than ever, are resilient, durable, fortified institutions that can take on inequality, fight poverty, advance justice and promote dignity and democracy.” Amen! Ford’s move kicked off an excellent Inequality and Philanthropy forum on the HistPhil blog. And Inside Philanthropy‘s David Callahan argued that Walker’s message is about significant change, which may be tough for the sector to hear.
- In a fascinating (and rather depressing) article, Eric Holthaus from Slate talks to climate scientists about how they are personally responding to the climate crisis, particularly how they have “factored in humanity’s lack of progress on climate change in [their] families’ future plans.” Yikes.
- Reserve funds are an incredibly critical (but often misunderstood) aspect of nonprofit financial strategy. But as she always does, Kate Barr from the Nonprofits Assistance Fund provides a clear roadmap to understanding.
- Paul Vandeventer uses the summer’s Greek Euro crisis to illustrate when networks (of which the Eurozone is an excellent example) thrive and when they fail. As he puts it, “Ignoring or giving short shrift to…the fundamental principles by which networks operate wastes precious reserves of time, money, and goodwill, and imperils all the hopeful good that organizations, institutions, and countries set out to achieve when they start down the path of networked action.”
- Late July saw a fascinating gathering of social changemakers around civic engagement, the “Breaking Through” conference, hosted by the Knight Foundation. Keynoter Peter Levine argued “This is the year that we can take back American politics. It’s up to us.” It was a great lineup of speakers and sessions about getting people engaged again. You can see video from the conference here.
- Is digital becoming a gamechanger in fundraising? Some think so. And in August Facebook launched a new Donate button, but is it really all that helpful to nonprofits? Some argue that Facebook is critical. Others think the Donate button is a fail.
- August of 2014 saw the record-breaking ALS Ice Bucket fundraising challenge. Many (including me) were skeptical of the campaign, but it turns out that last summer’s financial windfall helped scientists make a breakthrough in research to fight the disease.
- This August was the 10 year anniversary of hurricane Katrina. There were many great articles about where New Orleans has been and is now. But my two favorite were Greater New Orleans Foundation President Albert Ruesga’s Ten-Year Perspective on the philanthropic response, and Andrea Gabor’s New York Times article, The Myth of the New Orleans School Makeover.
- The first results came in from the New York state social impact bond experiment, and they weren’t great. Goldman Sachs invested in a Rikers Island program that attempted to reduce recidivism among teenagers.The program failed to meet its goals and Goldman lost money. But New York is not giving up, as first Deputy Mayor Tony Shorris said, “This social impact bond allowed the city to test a notion that did not prove successful within the climate we inherited on Rikers. We will continue to use innovative tools on Rikers and elsewhere.”
- I’m always a fan of examples of innovation. NPR provided a glimpse of how family farms are using pizza to reinvent their business model.
Photo Credit: Anne Adrian
In today’s Social Velocity interview I’m talking with Jay Geneske, Director of Digital at The Rockefeller Foundation.
Jay directs the Foundation’s digital strategy to engage internal and external audiences, champion organization-wide collaboration, deliver data that informs organization decisions, and pioneer new ways to hear and share innovative ideas. Jay previously served as the Director of Online Communications for Echoing Green, and has also served in digital and brand strategy roles at Carnegie Hall, Shedd Aquarium, and Steppenwolf Theatre.
You can read past Social Velocity interviews here.
Nell: Your role as head of digital for a major foundation is a pretty new kind of position in the world of philanthropy. Obviously the Rockefeller Foundation sees a lot of value (beyond marketing) in digital. How does digital play into the Foundation’s overall strategy?
Jay: Like every other sector, digital has changed the game for social impact. At the Rockefeller Foundation, I’ve been tasked to pioneer new ways to hear and share innovative ideas and perspectives on serving the needs of poor or vulnerable people in a time of rapid change.
That’s a tall order, but an exciting one.
This remit certainly includes how we utilize digital media to tell the story and impact of our work, to bring valuable information to those working in the sector, and to elevate our staff, grantees, and partners as thought leaders.
But digital goes far beyond traditional communication or marketing.
For external audiences, our digital focus is on influence. A carefully planned Twitter campaign can influence a policy maker to prioritize building resilience to the shocks and stresses facing their city. A data-informed segmented email can make a practitioner think more innovatively about solving a social or environmental problem. A well-crafted blog post syndicated on Medium, LinkedIn or elsewhere can connect our staff members to an important partner in the private sector.
Digital also plays an increasingly critical role for our internal audience. We’re reimagining how we work with each other and our hundreds of external partners by meeting people where they are and embracing nimble digital technology. For example, we’re bringing all of our files to the cloud for easy access around the globe and on mobile devices. We’ve also just launched an internal hub that brings valuable real-time data directly to staff members’ fingertips and also more easily captures and stores the critical informal knowledge and insights—typically stuck in email inboxes—that drive strategic decision-making.
What’s most important is the connective tissue between internal and external audiences, and confronting and embracing the increasing overlap and intersection to make us more effective.
Nell: The Rockefeller Foundation turned 100 in 2013 making it one of the oldest U.S. foundations. But the Foundation obviously works hard to stay relevant amid changing social challenges, technology, modes of communication, etc. What drives the Foundation’s desire and ability to be so nimble?
Jay: Our mission has always been to improve the well-being of humanity. To achieve that mission, we must work in a way that is suited to a rapidly changing world, especially where technology and greater interconnectedness have accelerated change and altered the way people live.
This reality manifests throughout our formal initiatives, such as Digital Jobs Africa, which is connecting Africa’s rapidly growing youth population with jobs in the ICT sector. Technology has also clearly changed the game for how and where we do our work. For example, I’ve awarded grants to networks with a robust online presence with the aim to surface new ideas and connect to new people who are solving big social issues.
But in many ways, the sector is just scratching the surface, particularly around data. As David Henderson from FII recently noted, for data to change the world, we must think beyond software and data visualizations. There is a serious lack of investment and focus on how to turn data into action.
Nell: A big initiative at the Rockefeller Foundation is the 100 Resilient Cities project that works to help cities adapt to the “new normal” of continuous disruption. How are you using digital in this particular project?
Jay: Digital plays a critical role in this initiative where our digital strategy is focused on influencing policy and business leaders and practitioners to focus on building resilience to physical, social, and economic challenges facing the world.
Through this work we’ve learned that content is the key to building influence. Our multichannel editorial strategy centers on creating and curating relevant, insightful, and vibrant content that our audience will find immediately actionable. It’s amazing to see how that content then travels around the social web, especially by politicians and business leaders.
We also know that reach is not the same as influence. Although growth is important, our focus has always been on influencing a specific audience, many of whom may not have huge a Twitter following.
Nell: In your work you talk about “digital storytelling” as a critical component of effective social impact, which goes far beyond a more traditional nonprofit approach to marketing. What does effective digital storytelling look like and what is the return on investment for a nonprofit?
Jay: While there have never been more ways to reach audiences, it has also never been more difficult to really reach them. I’ve also noticed a fast increase in big brands infusing questionable social change messaging and stories into their communications, and I worry that organizations driving real social impact will be left behind.
The Foundation has invested in storytelling –including launching the free tool Hatch for Good— to help organizations tell stories that are strategically planned, creatively crafted, and designed to achieve measurable outcomes.
In many ways, storytelling is an angle or a focus in social impact communications and marketing. It’s a way to stand out, to inspire action and donations, to drive policy change.
We’ve had tens of thousands of people use Hatch for Good in beta, and what’s become clear is that, for all the good they do, our mission statements are preventing us from telling effective stories. We try to insert them, sometimes word-for-word, into every story. And the result is a story so crowded that our audience never had a chance to take action.
Effective storytelling shows the human consequences of the problem our organizations address—and the solutions that give people hope. Stories about the people whose lives are directly affected by the work, and about the people who join forces with us to create change. These stories exemplify our mission statement, but are not bound by it.
When done strategically, these stories can prove a return on investment, case studies of which are posted on Hatch for Good.
Note: As you know, I am taking a few weeks away from the blog to relax and reconnect with the world outside of social change. I’ll be back later this week, but I have left you in the incredibly capable hands of a rockstar set of guest bloggers. The last, but certainly not least, is Antony Bugg-Levine. Antony is CEO of Nonprofit Finance Fund, a national nonprofit and financial intermediary that works with philanthropic, private sector and government partners to develop and implement innovative approaches to financing social change. Here is his guest post…
When we asked nonprofit leaders to identify top challenges as part of Nonprofit Finance Fund’s 2015 State of the Nonprofit Sector Survey, 32% said “achieving long-term sustainability,” by far the most popular response.
What does it take to reach the promised land of sustainability? It may seem counter-intuitive, but one of the best measures of organizational sustainability is not stability but adaptive capacity, the ability to act as circumstances require and opportunities allow. A truly sustainable enterprise must have the capacity to nimbly respond to external conditions. A strong balance sheet must allow for flexibility.
In the nonprofit sector, where pursuit of a mission is paramount, the ability to thoughtfully tack toward progress as funding conditions and community needs change is a hallmark of a success. That does not change the reality that our sector is notorious for restricted funding and hampered by a lack of available enterprise-level investment capital.
So, how do organizations build adaptive capacity?
Here are a few ways that nonprofits can build their adaptive “muscle” and be better prepared to change as the environment demands and opportunities allow.
Know your costs.
Nonprofits must understand the true costs of providing programs in order to make informed decisions about whether grants or contracts are able to cover those full costs, and how much subsidy might be required from other sources to fill the gap.
Many times, we see nonprofits use a grant amount as a starting point, and try to design a program that fits with the award amount. Heights and Hills, which provides services for older adults in Brooklyn and their families, asked us to help them take a different approach. Using customized tools, leadership now understands not only the current costs of running particular programs, but also how those costs change based on a variety of factors.
Like Heights and Hills, nonprofits need to be able to answer questions such as:
- “Which programs may be too costly if they are not fully supported by direct revenue?”
- “How do our costs change if we expand a program and need to hire additional staff?”
- “What if the amount of grant funding changes?”
- “Where might collaboration with another organization serve us well?”
Just say “no.”
The social sector attracts passionate activists who have a knack for seeing solutions where others see problems, and who are often driven by a deep inclination to say “yes” to those in need. But in order to build and preserve adaptive capacity and to truly remain mission focus, leaders must protect the nonprofit enterprise and its ability to continue its work. The common practice of accepting pennies on the dollar to deliver programs perpetuates unhealthy funding patterns and expectations. Armed with data about true costs makes it easier to say “no” to opportunities that ultimately detract from an organization’s ability to move the needle on mission.
New York’s Committee for Hispanic Children and Families did just that, and declined to pursue a large government contract because it sapped too many “indirect” resources. While at first glance, it seemed that the small allotment for “overhead” was enough, the amount didn’t nearly cover actual costs associated with the time that executive, finance and administrative staff were spending to keep the program afloat.
Saying “no” to a fiscally unhealthy grant preserves the organization’s ability to serve its clients well into the future. If we want to change embedded, unhealthy funding practices — and perhaps even elements of nonprofit culture that fuel these — we must be more willing to say “no.”
Ultimately, the benefit of adaptive capacity is the freedom to pursue what works. Some programs are more easily measured than others, but nonprofits and our funders need to invest in understanding impact. This is especially critical as we move toward an outcomes-based funding environment.
Scenarios USA, a nonprofit that uses storytelling for youth sex education, found a rare partner in the Ford Foundation when it decided to dramatically change its approach. Scenarios was open to asking, “Are our programs working?” and accepted that its core assumptions were inaccurate. With the Ford Foundation’s support, the organization revamped its program to focus on fostering critical thinking, which has tremendous influence on youth behavior.
Evaluating programs, experimenting with new ways of meeting mission and measuring outcomes over time are necessary to positive social change.
Seek support for major changes.
Money for programs is far more plentiful than money for enterprise-level change. Our survey found that nearly half of nonprofits report that they can have an open dialogue with funders about expanding programs, but just 6% feel comfortable conversing with funders about flexible capital for organizational growth or change.
There are exceptions. The California Community Foundation has partnered with Nonprofit Finance Fund and several others to offer strategy, management, and financial services aimed at strengthening the region’s nonprofits and building the durability of the sector. New York Community Trust has launched an initiative to help small arts organizations navigate various transformations and milestones such as leadership succession, business model changes, and facility renovations or moves. And New York’s Change Capital Fund is a collaboration of 17 foundations and financial institutions that is funding five New York community development organizations to help them refocus their strategies and develop new business models to address persistent poverty more effectively.
It is time to challenge the notion that funders aren’t willing to talk about money for adaptation and adaptive capacity, and to make the case for the right kinds of support.
It is hard to know what will be required of our sector in the years to come, but a steady trend of increased demand seems to indicate that the answer will be, “more.” Limited resources make doing more of the same nearly impossible. We must change the way we approach the challenges of our day, and organizations with adaptive capacity will lead the way.