There is an interesting report out today on the effectiveness of the Social Innovation Fund (SIF). Authored by the Social Innovation Research Center (SIRC), a nonpartisan nonprofit research organization, the new report details what has worked and what hasn’t in the six year history of the SIF.
Launched by the Obama administration in 2009, the SIF — a program within the Corporation for National and Community Service — provides significant funding to foundations that follow a venture philanthropy model by regranting that growth capital, along with technical assistance, to evidence-based nonprofits in “youth development, economic opportunity, and healthy futures” areas. In 2014, SIF expanded its efforts to include a portfolio of Pay for Success (social impact bond) grantees.
Now, 6 years on it is interesting to take a look back to understand what, if any, effect SIF has had on the nonprofit sector. The effect of the SIF is also critical given that, as of right now, the House and Senate have both defunded SIF in their respective funding bills.
To date, the SIF portfolio is made up of $241 million of federal investments and $516 million in private matching funds, which was invested in 35 intermediary grantees and 189 subgrantee nonprofits working in 37 states and D.C.
The SIRC report focuses on the current progress of SIF grants made during the first three years of the program (2010-2012). The report finds two clear positive results for the SIF so far. The SIF has:
- Added to the nonprofit sector’s evidence base about which programs work, and
- Built the capacity of nonprofit subgrantees, especially in the areas of “performance management systems, evaluations, financial management, regulatory compliance systems, and experience with replicating evidence-based models.”
On the negative side, however, the report finds that the SIF put real burdens on funders and nonprofits with its fundraising match requirements and the federal regulatory requirements. The report also finds that the SIF has had little effect on the sector as a whole because the SIF has not very broadly communicated their learnings so far.
To me, of course, most interesting are the report’s finding about capacity building at nonprofit subgrantees. There is such a need for nonprofit capacity building in the sector, and this was a clear goal of the SIF.
The SIF is one of few funders that do more than pay lip service to performance management by actually investing in building the capacity of nonprofits to do it. However, the SIF has been criticized for mostly selecting nonprofits that already had strong capacity. And indeed, the SIRC report finds that the SIF was most successful among those nonprofits that already had high capacity (in performance management, fundraising function, etc.) prior to SIF funding. Indeed, the report found that “poorly-resourced intermediaries working with less well-resourced community based organizations have been at a disadvantage.”
One SIF grantee in particular, The Foundation for a Healthy Kentucky, really struggled to build the capacity of their subgrantees whose starting capacity was so low. As they put it:
During the course of participation, it became clear that…[SIF] was really better suited for replicating existing programs or, at a minimum, investing in well-established programs that had some level of sophistication around organization systems and evaluation.
This mirrors earlier criticism of the SIF that it was set up to grow only those nonprofits that were already doing well, while those nonprofits that struggled with basic capacity issues were left out. The SIF has struggled to determine whether it is funding innovation (new solutions with limited capacity), or proven solutions (with a long track record and the corresponding capacity). It seems the two are mutually exclusive.
What the SIF is trying to do is such tricky business. To identify, fund and and scale solutions that work is really the holy grail in the social change sector. Certainly there are hurdles and missteps, but I think it’s exciting when government gets in the social change game in a big way. Six years is really too soon to tell. So I hope that this brief SIF experiment is allowed to continue, and we can see what a social change public/private partnership of this scale can really do.
To read the full SIRC report go here.
Photo Credit: Obama signs the Serve America Act in 2009, Corporation for National and Community Service
In the nonprofit world there is often a disconnect between funders of nonprofits and their understanding of the fundraising activity necessary to secure their gifts. Funders (and board members) rarely understand how critical fundraising is, how it works, and what’s required to do it well.
But in the hope that greater understanding leads to better actions, I’d like to offer 7 of the most important things funders (and really the sector as a whole) should understand about fundraising:
- Nonprofits Must Fundraise or Perish
It seems so obvious, but so many in the nonprofit sector act as if fundraising can be ignored or shuffled to the side. Board members hate to do it, and foundations refuse to fund it. But let’s be clear. Without a strategic, sophisticated mechanism for bringing regular revenue in the door there is no organization and certainly no social change. Fundraising must happen, and it must happen effectively in order for a nonprofit to survive and thrive. So funders (and board members) do not have the luxury of saying they don’t want to talk about, think about, or fund fundraising efforts.
- There is a Sector-wide Lack of Fundraising Knowledge
Because fundraising has for so long been ignored or sidelined, most nonprofit leaders and their board members don’t have sufficient fundraising experience or training. And neither do funders. There hasn’t been enough research into the fundraising discipline broadly and little investment in educating nonprofit leaders about how to do it well. The end result is that few people know how to crack the fundraising nut.
- Every Nonprofit Has Two Customers
Part of the solution to cracking that nut is understanding that unlike for-profit entities, nonprofits have two (not just one) set of customers. Nonprofits provide products and/or services to the first customer (“Clients”), but “sell” those services to the second customer (“Funders”). Therefore “sales” in the nonprofit world is much more complex than it is in the for-profit world. Yet for-profit businesses can spend much more money on their sales and marketing staff, training, systems and materials than a nonprofit is allowed to spend on fundraising.
- It Takes Money to Make Money
So in order to do fundraising well nonprofits must invest in their fundraising function (planning, staff, training, systems, materials). Those nonprofits that develop a strategic financial model that is fully integrated with their mission and core competencies will be more sustainable and more effective at creating social change. So nonprofit leaders must start asking for the money necessary to build effective financial models.
- Sustainability is a Funder’s Problem Too
And funders must start providing it. Funders often want a nonprofit to demonstrate financial sustainability, but those same funders won’t invest in the capacity necessary to create that sustainability. Instead of just pointing out the sustainability problem, funders must become part of the solution. Funders should step up to the plate to help nonprofits create a capacity building plan and then provide capacity capital (along with other fellow funders) to build a more sustainable organization that will survive once a funder is gone.
- Earned Income is Not a Solution
But a more sustainable organization does not mean one based on earned income, or selling a product or service. Nonprofits will always be subsidized, at least in part, by private and/or public contributions. By definition, nonprofits exist to address a failing in the market economy (i.e. not enough food or jobs). Thus, those failings will never be overcome purely by market forces. So while earned income is something every nonprofit should explore, it is not right for every organization and will never become 100% of a nonprofit’s revenue model. So don’t confuse sustainability, which means a longterm financial model, with earned income.
- Nonprofit Leaders Fear Funders
Let’s just be honest. A funder is providing much needed resources to a nonprofit and that automatically creates a power imbalance. Until we figure out a way around that inherent dynamic, funders must limit the hurdles they put in the way of nonprofit leaders and instead give them the financial runway to make their social change vision happen.
Let’s face it, without money there is no social change. But the knowledge, experience and infrastructure necessary to generate enough money is woefully short in the nonprofit sector. That could change if funders lead the way toward more investment in strategic, sustainable financial models.
Photo Credit: 401K Calculator
There was a great post on the Stanford Social Innovation Review blog last week that clearly articulates a dysfunction in the nonprofit sector and when recognized by nonprofit leaders and their funders could reshape the sector.
In the SSIR, veteran nonprofit leader Kristen Joiner argues that because 86% of Fortune 500 leaders are men and 70% of nonprofit workers are women “gender dynamics” often cripple the nonprofit sector:
Like the provider of old, heading off to the office for a day of work, the private sector is focused on money and profit. The nonprofit sector, as the nurturing caretaker, is charged with caring for the young, the sick, the elderly, and the poor…This creates a have-and-have-not situation, where one side holds the money and power, and the other side asks for an allowance to do their “good work,” trying to get traction but more often getting stuck in a rut created by this dysfunctional dynamic…Investors in the social sector make it difficult for nonprofits to gather the resources to measure and pivot as necessary for success. They are looking for the proverbial “good girl”—an organization that doesn’t rock the status quo, that gives them a credential to show they “care” or “contribute.”
Joiner’s argument is not a new one, in fact Robert Egger voiced it in a 2008 Chronicle of Philanthropy article, where he described how the modern nonprofit sector was born out of the gender biases of the mid-20th century:
[In the 1970s and 80s] the number of nonprofits in the U.S. exploded…[led by] tens of thousands of college-educated, stay-at-home mothers…Many of these “founding mothers” brought with them an internalized understanding of their “role”…As long as these new organizations limited their work to nurturing, feminized charity work…they were humored, and even honored. [And foundations were] often dominated by men who were charged with dispensing money made by other men. Foundations rarely awarded money that fostered independence for grantees…In these formative years, and even today, grants are primarily made to submissive organizations — those willing to jump through countless hoops, those that would not push back when confronted with short-sighted policies, and those that would make do with much less than they knew was needed to do the job right…The rules that govern our sector — indeed, the very nature of our how we view ourselves — is rooted in systemic sexism.
Although I have worked in the nonprofit sector for 20 years, this “systemic sexism” never occurred to me until I read Egger’s article a few years ago. But now I see it often. And while I don’t think sexism should become a shorthand for everything that ails the nonprofit sector, I do think nonprofit leaders, board members and funders must be more aware of the underlying forces at play, so that we can all work to overcome them.
There are several key areas where this systemic sexism results in an uneven playing field for nonprofits:
- Less Access to Capital. Businesses have access to various forms of capital (startup, mezzanine, risk), whereas nonprofits struggle to attract day-to-day revenue, let alone the capacity and growth capital they so desperately need.
- Inadequate Sales Function. In the for-profit sector, sales and marketing are a much researched, supported and heralded part of a business model because it is well understood that without sales there is no business. But in the nonprofit world, sales — called “fundraising”– is misunderstood, under-supported, and sometimes ignored by nonprofit leaders, board members and funders.
- Tighter Limits on Overhead. Although this is starting to change, nonprofits are often encouraged to spend only a small amount of money on infrastructure, administration and fundraising (overhead expenses), but for-profit companies can spend whatever it takes.
- Less Investment in Leadership. Business leaders are encouraged to invest in professional development, training, and leadership coaching, but a nonprofit leader often must figure it all out on her own.
- A Restricted Role in Politics
While businesses can spend millions on lobbying and supporting political candidates, nonprofit political action is much more restrictive.
And the list goes on. Many of the dysfunctions present in the nonprofit sector are rooted in years and years of sector inequality. If we hope to make social change more effective and sustainable, we must free the sector of these shackles.
Photo Credit: Campbell’s Soup
In today’s Social Velocity interview I’m talking with Mary Kopczynski Winkler, senior research associate with the Center on Nonprofits and Philanthropy at the Urban Institute. Mary is a nationally recognized expert in the field of performance measurement and management. She is a founding member of the Leap of Reason Ambassadors Community, a private community of nonprofit thought leaders and practitioners committed to increasing the expectation and adoption of high performance in the social sector and who released the Performance Imperative earlier this year.
You can read past interviews in the Social Velocity interview series here.
Nell: PerformWell is an effort among Urban Institute, Child Trends and Social Solutions to offer tools and strategies for human services nonprofits to measure their work. How successful has this effort been and what are your plans for continuing to grow the capacity of nonprofits to measure their work?
Mary: PerformWell is a free, interactive, web-based resource designed to help human services nonprofits gain knowledge about performance management, access tools and resources they need to better service clients and meet outcomes, and obtain strategies for effective, efficient service delivery. Launched in March 2012, the demand for PerformWell has exceeded our expectations with more than 400,000 visitors (from all 50 states and more than 200 countries); 25,000 individuals have registered for our webinars; and more than 140,000 assessment tools have been downloaded from our site. Webinar survey results are routinely high, but we are working to put additional systems in place to track how nonprofits are using various aspects of PerformWell and to what end.
In 2013, the PeformWell partners engaged in a business planning process with Root Cause. Market research confirmed our views about a large unmet need for performance measurement knowledge and high interest in the resources offered through PerformWell, but that additional products and services are also desired, such as webinar training series, regional user conferences, and customized engagements with nonprofits. Users wanted a more interactive web-experience.
Our short- to medium-term goals include substantial updates to the website to improve the user experience (we also plan to solicit user feedback during and after these changes are implemented); development of additional products and services better aligned with the feedback obtained from the market research undertaken by Root Cause; and exploration of partnerships and sponsorships with nonprofits, consultants and funders to generate additional revenue and resources to expand the content, reach and use of PerformWell to improve the adoption and application of performance measurement and management practice across the nonprofit sector.
Nell: Some believe that measurement is perhaps more straightforward for human services nonprofits — you can measure change to an individual’s behavior or life circumstances — but measurement is more difficult for arts organizations or advocacy groups. What are your thoughts on that?
Mary: Sometimes I think this argument serves as a convenient excuse for organizations to avoid putting even the most basic systems in place to track progress or otherwise hold themselves accountable to their constituents. In 2007, with support from the Hewlett Foundation, the Urban Institute and the Center for What Works, we published a series of simple frameworks, as part of our Outcome Indicators Project, to help nonprofits in 14 program areas engage in performance measurement. Two of these areas are advocacy and performing arts. The Urban Institute also provided research support to the Performing Arts Research Coalition (PARC) to develop standardized surveys to help performing arts organizations across the country obtain more routine and better data from audience members, subscribers, and the community.
Establishing a causal link between advocacy or arts interventions and impact is, in my view, more challenging than for human service organizations. In the case of advocacy organizations, it can be very difficult to isolate the contributions of a particular campaign or even organization to a policy or legislative outcome.
It is, however, possible to devise strategies for capturing information on earlier stage outcomes, such as increased awareness.
I recently participated on a panel at the annual OPERA America conference – on “internal metrics for civic impact.” As much as measurement activities have evolved from the days of the PARC coalition, I observed that most of the metrics and data points were still very internally focused on measures of participation and attendance and fall well-short of anything approximating community or civic impact. I encouraged those present to consider stepping away from a focus on the impact of an individual opera company’s contribution to civic impact, and recommended instead more of a collective impact approach in collaboration with other arts, civic, and education organizations in a community.
In this case, I even hesitated to use the word “impact,” and suggested the group consider distinguishing between collective contribution toward a modest set of civic outcomes (e.g., performing arts promote understanding of other cultures or are a source of pride for those in the community) and the more traditional causal attribution usually reserved for the term “impact.”
Nell: Caroline Fiennes, among others, has argued that individual nonprofits should actually do less evaluation and rather rely on larger research studies to prove their theories of change. What do you make of that argument and the difference between evaluation and measurement?
Mary: I agree with some of what Caroline puts forth here – particularly her observations about “withholding (unflattering research) and publication bias” – an issue that University of Wisconsin-Madison professor Donald Moynihan has termed “performance perversity.” I also agree both with her suggestion that evaluations be done by a third-party to reduce any tendencies toward subjective reporting or bias and her endorsement of a greater consideration of shared metrics.
I am troubled, however, by the fact that only 7% of UK social-purpose organizations are interested in improving services, and her somewhat cavalier suggestion that monitoring and evaluation “wastes time and money.” Although she is not alone in this second argument (see for example Bill Shambra’s “take-down” of Charity Navigator’s efforts to encourage greater use of performance metrics in “Charity Navigator 3.0: The Empirical Empire’s Death Star?”), such sweeping generalizations undermine the legitimate and courageous attempts of many nonprofits to use data for program improvement efforts.
I agree with Phil Buchanan in that there is a “moral imperative” to make an honest attempt to understand if resources are being used effectively and certainly to guard against the possibility that programs could be doing more harm than good as organizations like Latin American Youth Center and Harlem Children’s Zone have discovered and since corrected.
I see measurement as a necessary practice for every nonprofit. But measurement is different from evaluation. Nonprofits need to start by developing a measurement infrastructure that makes sense for their organization – one that supports their mission and commitment to serve and improve the lives of their clients or constituents – not one that is reactionary and responsive to funders. It is precisely this kind of infrastructure that can lay the groundwork for a more rigorous evaluation, at a time that is right and appropriate for the organization’s stage in development.
I see measurement and evaluation along a continuum of inquiry that should be designed to support the learning objectives of an organization. Measurement helps organizations to take the day-to-day or month-to-month pulse of various activities and program results – these snapshots in time or scorecards help managers and service providers understand trends and provide an opportunity to correct, modify or otherwise adapt operations.
Evaluation is, by definition, more rigorous, more expensive, and takes considerably more time to see results. Evaluation serves a very important role as organizations make decisions about whether to continue, grow, scale or otherwise expand services, but it needs to occur at the right time – and certainly not as an organization is just getting off the ground.
Nell: It is difficult for most nonprofits to find funding for measurement work. For example, in the most recent Nonprofit Finance Fund State of the Sector survey, 69% of nonprofit respondents said their funders rarely or never cover the costs of measurement. How do we change that, or can we?
Mary: Although I am sympathetic to this argument and argue frequently that foundations have a unique and critical role to play in helping to build the capacity of nonprofits to better engage in measurement and evaluation, I think we need to change the conversation to one that focuses on the shared responsibility between nonprofits and funders for making the necessary investments in measurement and evaluation.
If nonprofits are truly ready to embrace a culture of measurement and high performance, then they need to reorganize operations in ways that embed measurement practice at every level of the organization, and change expectations from front-line workers all the way to the board of directors.
This means things like: defining expectations about data collection in job descriptions; setting aside a small percentage of funding for evaluation as a line-item in every grant request; and using data in meaningful ways in everyday discourse. Likewise, funders need to work more collaboratively with grantees to understand the data needs and capacity of nonprofits, consider funding longer-term grants that build in support for measurement and evaluation, and stop asking for data or reports that aren’t part of the conversation about continuous improvement and learning. Funders, too, can support field-building efforts to develop additional tools and resources in support of the measurement work nonprofits seek to accomplish.
There are a number of exemplary efforts already underway including Edna McConnell Clark Foundation’s Propel Next and the World Bank Group’s support of Measure4Change and the East of the River Initiative. Each of these efforts feature: targeted grants to build measurement and evaluation capacity of participating nonprofits; access to technical assistance resources; and a community of practice to help grantees learn from each other, share successes or failures, and reduce what is all too often a sense of isolation among measurement and evaluation practitioners.
Photo Credit: Urban Institute
May was another busy month in the world of social change. For a start there was: a behavioral economics approach to social change, continued focus on civic tech, a tool for calculating a nonprofit’s true costs, new definitions of membership in the digital age, the evolving public library, digital sabbaticals, and much more.
Below are my 10 favorite reads in the world of social change in May, but feel free to add to the list in the comments. And if you want a longer list, follow me on Twitter, LinkedIn, Google+, or Facebook.
You can also read 10 Great Reads lists from past months here.
- Perhaps some solutions to social problems lie in behavioral economics. Writing in The New York Times, economists Erez Yoeli and Syon Bhanot and psychologists Gordon Kraft-Todd and David Rand argue that the opinion of others, in this case regarding the preservation of natural resources, is a strong social change motivator.
- Civic tech, (the use of new technology to better engage citizens in democracy) has become quite the buzzword lately. But how do we know which civic tech solutions are actually creating change? Anne Whatley from Network Impact offers some tools for assessment in that arena.
- And another nonprofit tool comes from Kate Barr of the Nonprofits Assistance Fund. She provides a great tool to help nonprofits calculate and then articulate to funders the full costs of their work.
- Daniel Stid from the Hewlett Foundation writes a thoughtful piece on what separates good strategic planning from bad, because as he puts it “The real benefit of planning is not the final document but rather the discipline the process imposes, the new information it generates, the working relationships it fosters, and the conversations, insights, and commitments it sparks.” Amen to that!
- In this age of social media and technological connectedness, how do we create more formal structures for belonging to institutions? Melody Kramer, formerly of National Public Radio, is a Knight Visiting Nieman Fellow working on that very question, and she offers some beginning thoughts on the project, including, “Imagine if public radio stations functioned as Main Streets…or in the same way that local public libraries do? It would transform the way people could interact — and participate — in the local news process, and would enhance the stories stations put out on air.” Fascinating.
- Speaking of libraries, NPR writer Linton Weeks provides a history of the public library and how it continues to (and must) evolve in the digital age.
- Great philanthropic futurist Lucy Bernholz has been offline for a bit, and it turns out she took a digital sabbatical. She reports that “without the addictive stimulation and distractions of digital life it feels like my brain grew three sizes.” What a great (and necessary) idea!
- Writing on the UnSectored blog, Marie Mainil describes the importance of building and supporting social movements to create global social change. As she puts it “Collecting data on the dynamics of local, regional, national, and international social change campaigns is the next frontier of organizing for social change. With a visual multi-level collection of ladders of engagement from across the world, social change actors would be able to better plan and coordinate tactics and actions at scale, thereby increasing their chances of success.”
- In May the Center for Effective Philanthropy held their biennial conference. Ethan McCoy provides great roundups of day one and day two. I almost feel like I was there!
- Never one to put things lightly, William Schambra cautions against what he sees as the hubris of tech philanthropists and his fear that they desire to “fundamentally…reshape the social sector in their own image, based on their supreme faith in advanced technology.”
Photo Credit: Erin Kelly
Over the past few years I’ve developed a Social Velocity library of books, step-by-step guides, and webinars. My hope is that these tools can make the concepts I use with my consulting clients accessible to smaller and start up nonprofits who aren’t ready for or interested in a customized approach.
The tools follow the methods I develop in my consulting practice (like creating a financing plan, growing the board of directors, designing a theory of change) so when my consulting approach changes over time, the tools must change as well.
Which brings me to the Design a Theory of Change Guide. I created this guide a couple of years ago, but I recently changed the Theory of Change framework I use with my clients. I used to follow a more traditional logic model approach, but over time I’ve come to realize that there are really five specific and complex questions that make up a Theory of Change.
And those are:
- What is the target population or populations you are seeking to benefit or influence?
- What relevant trends in or changes to the external environment are occurring?
- How and where are your core competencies employed?
- What changed conditions do you believe will result from your activities?
- What evidence do you have that this theory will actually result in change?
The completely revised Design a Theory of Change Guide walks you step-by-step through answering these questions and creating your nonprofit’s own Theory of Change.
A Theory of Change is a fundamental building block to everything that your nonprofit does. Because without a Theory of Change, you won’t know what you are trying to accomplish, how you will get there, or whether you are moving towards it, and you certainly won’t attract the funding necessary to get there.
A Theory of Change can strengthen your nonprofit in many ways:
- Guides your strategic planning process. If you understand your nonprofit’s overall Theory of Change and what you exist to do, it is much easier to chart a future course.
- Helps revise the vision and mission of your organization, making them stronger and more compelling.
- Gives a framework to prove whether you are actually achieving results and creating real social change.
- Provides a filter for new opportunities as they arise. Do new opportunities fit within your Theory of Change?
- Engages board members and other volunteers, friends and supporters in your work. If people understand the bigger picture, they will be more inclined to give more time, energy, and other resources to the work.
- Allows staff to understand how their individual roles and responsibilities fit into the larger vision of the organization. This can increase staff morale, productivity, communication and overall commitment to the organization.
- Provides the basic argument for a case for investment or other fundraising messaging. With a Theory of Change, you can articulate what you are working to achieve, in a compelling way.
A Theory of Change is so fundamental because you cannot chart a strategic direction if you don’t know what you are trying to change. And you can’t prove that you’ve changed something unless you have articulated what it is that you want to change in the first place. And you certainly can’t convince funders, volunteers, and key decision makers to support you if you can’t tell them what you are trying to change and whether you are actually doing it.
So to truly create long-term social change you must start with a Theory of Change, which is why I encourage every nonprofit engaged in social change to create one.
You can learn more about the Design a Theory of Change Guide and download a copy of it. If you downloaded the previous Theory of Change Guide and would like the newly revised version free of charge, let me know, and we’ll send it to you.
As always, you can see all of the Social Velocity books, guides and webinars available for download on the Social Velocity Tools page.
One of the things I love about my job is that I get to travel to different parts of the country talking with groups of social change leaders about how to think about their work in new ways. I speak to nonprofit and philanthropic conferences, events, groups, even boards about trends in the nonprofit sector and how social change leaders must adapt.
Recently I have spoken to groups in Portland, Seattle, Sacramento, Dallas, and Idaho. You can see a video of me speaking to the Seattle Association of Fundraising Professionals Conference below (or click here) where I was talking about one of my most popular topics, How to Move From Fundraising to Financing.
I speak about any of the topics covered in the Social Velocity blog, but here is a general list of topics:
- Moving From Fundraising to Financing
- The Future of the Nonprofit Sector
- Overcoming Nonprofit Myths
- Reinventing the Nonprofit Leader
- The Power of a Theory of Change
- Getting Your Board to Fundraise
- How To Raise Capacity Capital
- Creating a Sustainable Financial Model
- Messaging Impact
- Creating a Succession Plan
- Honest Conversations Between Funders and Nonprofits
- The Critical Connection Between Mission and Money
Photo Credit: Social Velocity
In today’s Social Velocity interview, I’m talking with Linda Wood, Director of the Haas Leadership Initiative. Over the past decade, the Haas, Jr. Fund has invested over $20 million in strengthening the leadership of more than 75 grantees in its key priority areas– immigrant rights, education equity, and gay and lesbian rights—through the Flexible Leadership Awards program. In that time Linda has become a leading voice on the topic of leadership in the nonprofit and philanthropic sectors. Prior to joining the Fund, she advised senior leaders on strategy, organizational performance and change management at Cap Gemini Ernst & Young.
You can read past Social Velocity interviews here.
Nell: The Evelyn and Walter Haas, Jr. Fund has put a lot of investment behind the development of nonprofit leaders, but you are quite an anomaly in the philanthropic world. Support for leadership development is taken as a given in the for-profit world, but rarely recognized, let alone funded, in the nonprofit world. Why do you think there is that discrepancy in leadership development between the nonprofit and for-profit worlds?
Linda: It really is striking to see how differently the business sector and the nonprofit world view the issue of leadership. I went to business school myself, and spent eight years working as a management consultant in the private sector where it’s basic good practice to invest in the people you’re counting on to move the work forward. Strengthening leadership is seen as part and parcel of what it takes to fuel innovation and success.
On the other hand, in the social sector, a lot of foundations think of leadership development as a luxury–a nice-to-have that’s not linked to impact. That’s reflected in recent estimates that less than 1% of total foundation spending is going to strengthen leadership in the nonprofit sector.
Why? Well, I think we’ve got a lot of myths about leadership in our sector.
One myth is that leadership development is simply not a priority for nonprofit leaders because most don’t ask for it. And, when grantees don’t ask, many foundations assume that there’s no need. But we have not yet created a culture in the nonprofit sector that says it’s ok to invest in yourself and in other senior organizational leaders. We place a high value on self-sacrifice. Given the choice, nonprofit leaders will almost always direct general support to critical services and programs. That’s why actually I think it’s important for foundations to earmark funds for supporting leadership.
Another related myth is that leadership is part of overhead, and overhead should be minimized at all costs. From this perspective, investments in the organization’s leadership are cleaved off from the work and seen as wasteful overhead rather than intrinsic to achieving the organization’s goals.
Nell: You recently curated a blog series on the Stanford Social Innovation Review where funders who have supported nonprofit leadership development articulated its value. How helpful do you think that step was in getting the broader philanthropic community to understand the value of leadership investment? And do you have additional plans to help move leadership development forward among your peers?
Linda: Our goal in putting together the SSIR blog series was to help build momentum around the idea of investing in leadership being a core grantmaking strategy that can catalyze diverse programmatic goals and not just a boutique strategy that only some funders can afford. By featuring perspectives from top-level executives from a half dozen foundations of very different sizes and with very different funding priorities, ranging from the Omidyar Network to the Women’s Foundation of California, we hoped to offer examples that would inspire more foundations to see possibilities for their own work.
To be honest, it’s hard to know whether we are moving the needle. But it does seem like there has been mounting attention to philanthropic underinvestment in leadership lately. Just over the past couple of months GEO and then NCRP have both released major reports making the case for more attention to leadership and talent development. And the Talent Philanthropy Project held a meeting in New York in March that attracted over 60 people including nonprofit leaders, funders, consultants, and intermediaries.
I think the real question is whether increased interest will translate into significant increases in investment—the kinds of sustained, strategic investments in leadership that advance the capacity of organizations, networks and movements to achieve better outcomes. The danger is that we foundations will sprinkle a little leadership development funding here and there, perhaps send a handful of our grantee leaders to a training, and call it a day.
Nell: You recently announced a new initiative to seek solutions to the challenges, which you uncovered in your 2013 UnderDeveloped study with CompassPoint, facing nonprofit fundraising. What are your long-term plans with this initiative and what do you hope to find?
Linda: The UnderDeveloped report caused such a stir across the country. I have heard from so many people—funders, grantees, consultants, board members, etc.—that the report gave voice to concerns they’ve held for a long time. It clearly hit a pain point. And the big question it begs is what to do about it?
At the Haas, Jr. Fund, we’ve decided our next step is to try and refine concrete strategies that will help our grantees, and hopefully others, achieve breakthroughs in their fundraising.
One of our goals is to help organizations be more strategic about their approach to fund development. There’s so much out there. The nonprofit fundraising industry is full of consultants, speakers, large trade associations and technology providers. They offer costly, sometimes contradictory advice, patented approaches, one-off success stories, and a dizzying array of technology tools and platforms for raising money. As a result, our work in fundraising may be less about innovating and more about separating the wheat from the chaff, helping grantees chart a coherent, fruitful course through the thicket of possibilities.
Right now, we’re in the R & D phase. Here are some of the questions we’re exploring:
- What fundraising success stories can be replicated by our grantees? To answer this question, we will conduct “bright spots” research focused on small- to medium-sized organizations who have had sustained success with individual fundraising.
- How can we address the fundraising talent gap? To answer this question, we are conducting a scan of fundraising training and exploring the feasibility of a “fundraising fellowship.”
- One fund development approach that’s attracting attention is developing a “culture of philanthropy.” But what does that mean? And what difference does it make?
- Are there ways to help an entire field of grantees? To identify potential investments that might help a field of grantees, we are testing whether and how donor research can help LGBT grantees with fundraising.
As we tackle these questions, we are sharing what we’re learning along the way through a series of blogs on our website. And we’d love to hear from other people. What questions are missing? What can a foundation’s role be in supporting fundraising capacity?
Ultimately, this isn’t just an intellectual exercise. Our goal is to get better at supporting grantees around fund development, and to that end, we anticipate beginning to pilot some new strategies starting in 2016.
You asked what we hope to achieve with this work over the long term. I think if I could fast forward a couple of years, I would hope we will have made a dent in strengthening the talent pipeline for development directors, and that we are helping organizations bring more skill, focus and success to their fundraising, especially in tapping individual donors.
Nell: Philanthropy has traditionally been less interested in funding capacity building (like leadership development and fundraising). Do you think that’s changing? And/or do you think we will have more hope of changing that as generational shifts take hold in philanthropy?
Linda: Yes, I often feel like there’s a real divide between the folks in philanthropy who are focused on the what and those who are focused on the how.
Obviously, we’re all in this work for the what—to help create a more just and sustainable world. But often in philanthropy, conversations about things like capacity and leadership are disconnected from the conversations about the content of the work. We hold separate conferences; we belong to different affinity groups; we read different articles…
So, as someone who’s a member of the how club (as we sometimes jokingly refer to it among ourselves) I think we need to keep strengthening the connection between building leadership and capacity and delivering programmatic wins. No matter what a given foundation seeks to achieve programmatically–whether that’s community health, environmental justice or education equity–it’s important to ask how they will get from where they are today to where they want to be. What is our responsibility as funders to support the people and organizations who are advancing this work? What kind of staff, board and community leadership will be needed to get where we all want to go? And how can we transmit in words and in concrete actions that we are in this together and that we want to provide them with the resources to do their best work.
Photo Credit: Evelyn & Walter Haas Jr. Fund