10 Great Social Innovation Reads: February 2012

February was the month to learn from other’s mistakes — from Komen to Hull House there was some great analysis about what went wrong and what can be learned. The other thing emerging in February was new social media darling, Pinterest, as an opportunity for nonprofits to tell their story visually.

Below are my ten picks of the best reads in social innovation in February, but as always, please add what I missed in the comments. And if you want to see other things that caught my eye, follow me on Twitter, Facebook, LinkedIn or Pinterest.

1. The biggest news in February was Susan G. Komen Foundation’s repeated strategy and PR blunders when they pulled funding from Planned Parenthood, then reinstated the funding. Kivi Leroux Miller offered tips to recover from a PR scandal. Nancy Schwartz broke down Komen’s “busted nonprofit brand” and Beth Kanter described the 5 stages of a social media PR disaster.  And when things finally settled down a bit, Komen stumbled again with their attempt to reassure donors.




2. Always a great resource, the Nonprofit Tech 2.0 blog provides 50 Fun, Useful, and Totally Random Resources for Nonprofits




3. “As modern businesses search for a soul, who better than Millenials to help find one?” This month there were two articles about how the Millennial generation approaches work and ultimately how it will change how we all work: 13 Ways The Recession Has Changed How Millennials View Work and The Crisis of Meaning in the Millennial Workforce.




4. Tom Watson launched a new column in Forbes focused on social entrepreneurship, and his inaugural post took an interesting spin on the endless “what is social entrepreneurship” conversation by finding parallels between Steve Jobs and Occupy Wall Street.




5. Sometimes Dan Pallotta gets it really right, and that is especially true with his post arguing that a huge missed opportunity for philanthropist is to invest in the fundraising capacity of nonprofits.




6. In the Harvard Business Review blog Nilofer Merchant argued that technology is fundamentally changing how organizations operate. This applies to nonprofits as well, and we should all take note.




7. If you, like most people, struggle with creating content for your blog, this infographic makes it so much easier.




8. Writing in the Washington Post, Antony Bugg-Levine, head of the Nonprofit Finance Fund, argued that nonprofits must embrace breakthrough innovations like restructuring their approaches to social problems and using capital to build organizations, “The sooner we confront our new economic reality and support visionary thinking and organizations, the sooner we can begin to rebuild a sustainable safety net.”




9. The collapse of one of America’s oldest and most successful nonprofit organizations late last year, Hull House, provides a cautionary tale to other nonprofits that may not be employing good financial management, argued Rick Moyers.




10. An interesting debate loomed at the end of the month because of a study by the Center for Philanthropy at Indiana University that found nonprofit managers lack key financial knowledge. But Kate Barr and Ruth McCambridge took issue with the study’s methods arguing that the study missed the mark.

Photo Credit: aithom2

Tags: Antony Bugg-Levine, Dan Pallotta, Fundraising, Hull House, nonprofit financial management, nonprofit social media, nonprofits and Pinterest, Occupy Wall Street, Social Entrepreneurship, Steve Jobs, Susan G. Komen Foundation

Financing Not Fundraising: The Critical Alliance Between Executive & Development Directors

In this month’s post in the on-going Financing Not Fundraising blog series I’m talking about creating a productive partnership between a nonprofit’s leader (the Executive Director or CEO) and a nonprofit’s chief revenue generator (typically the Development Director).  If your nonprofit is going to start financing instead of fundraising, you must work to forge an effective Executive Director and Development Director relationship.  If you are fully integrating money and mission, then your ED and DD should be planning, talking about, debating, and integrating their work on a daily basis. If that’s happening, the organization has a much better chance for long-term financial sustainability.

If you are new to the Financing Not Fundraising blog series, the series is about how nonprofits must break out of the FUNDRAISING (individual donor appeals, events, foundation grants) box and instead create a broader, more strategic approach to securing the overall FINANCING necessary to create social change. You can read the entire series here.

If a nonprofit’s Executive Director can fully embrace, support and promote the work of the Development Director, the organization can become much more financially sustainable. There are several clues that a productive partnership between a nonprofit’s Executive Director and Development Director exists:

• The Executive Director charges the Development Director with leading all revenue activities that the organization pursues (public, private and earned income) instead of limiting the Development Director’s role to just private income streams (individual, foundation, corporate).




• The Executive Director asks the Development Director to create an ambitious, comprehensive annual revenue plan in conjunction with the organization’s overall strategic plan and then to  monitor that plan to successful implementation.




• The Executive Director creates the organization’s revenue budget through an open and honest negotiation with the Development Director and based on the Development Director’s annual revenue plan, as opposed to simply telling the Development Director how much to raise.




• The Executive Director continually works to educate the entire board and staff about how critical money is to the work of the organization and how each member of the board and staff has a role to play, as opposed to leaving all revenue-generating efforts up to the Development Director.




• The Executive Director makes a constant and conscious effort to encourage the Program and Development Directors to work together, understand each other’s viewpoint, support each other’s goals and empathize with each other’s roadblocks. The Executive Director treats both positions, and both departments, as equally critical to the success of the organization.




• The Executive Director works closely with the board chair to make sure every board member is meeting their give/get requirement and doesn’t leave the Development Director to try to strong arm board members to contribute.




• The Executive Director encourages and helps secure funding for the Development Director’s requests for the additional infrastructure (donor database, staffing, materials, technology) required to deliver on the ambitious goals of their revenue plan.




• As with each member of their staff, the Executive Director evaluates the Development Director’s performance on an annual basis and sets performance goals for the Development Director for the coming year based on the overall strategic plan of the organization.

As the leader of a nonprofit organization it is up to the Executive Director to forge an effective partnership with their chief fundraiser. An ED that buries their head in the sand and leaves money up to their Development Director will eventually find their Development Director gone, their funding diminishing and their long-term financial outlook bleak.

If you want to learn more about how to move your nonprofit from fundraising to financing, check out our ongoing Financing Not Fundraising Webinar Series and our Financing Not Fundraising e-book.

Photo Credit: USAJFKSWCS

Tags: development director, development director job description, executive director, financing not fundraising, managing nonprofit staff, nonprofit capacity capital, nonprofit financial sustainability, nonprofit fundraising, nonprofit staff evaluation

How Nonprofits Can Thrive While Awaiting Economic Recovery

After 3+ years of a difficult recession it looks like the economy might be starting to turn around. That’s great news. But for the nonprofit sector, which is always the first hit by and last to rebound from a recession, it might still be awhile until they enjoy the looming economic recovery. But it does no good for nonprofit leaders to throw up their hands and curse the economy. Instead, nonprofits should seize this opportunity to rethink how their organization brings money in the door.

There are some key things nonprofit leaders can do to create a sustainable financial model in the midst of lingering economic uncertainty:

• Take a Step Back. Stop putting your organization in the “fundraising” box and take a big step back. Figure out an overall financial model for your organization that connects with your mission and your organization’s core competencies. Don’t just go through the regular fundraising motions (direct mail, events, grants). Rather, analyze how to create a long-term financial model for your organization.
  




• Harness Your Board. Your board of directors ideally is a group of people who bring connections and expertise that could help your organization. Tap into that. Educate them on what your organization needs and brainstorm how they can help. Now is not the time to be shy. Be strategic about what your board can do and get them to do it.




• Create a Plan. If your organization doesn’t have a strategic plan and a revenue plan, create them. You raise money by being strategic, first about what your organization is and does, and second about how you are going to create sustainable revenue streams. People give to causes that they care about, and they give even more money to organizations that are strategic about what they do and how. A good strategic plan is an invaluable tool around which you can build investment. And a good revenue plan gives you a step-by-step way to generate money.




• Reallocate Resources. As a nonprofit organization you have limited resources (money, staff, technology, time) with which to raise money. You want to make sure that the effort you put in has the highest return on investment. Calculate the direct and indirect costs of every revenue-generating activity and determine the real net income you generated. Are there better, more effective ways to raise more money for less cost and effort?




• Use Technology. Move your communications with donors and prospects online. You’ll save money and have a better chance of getting more and bigger gifts. Send email newsletters, campaigns, event invites. Survey your donors. Create an online community through social media where people can get to know your organization and become involved. People will become more interested in your work and more invested in the organization.




• Learn from the Best. Now is the time to learn from others, get a fresh perspective, find a mentor or coach for your Development Director. Use social media to find interesting and innovative people and ideas. Talk with your fellow social change leaders locally, nationally and internationally. Attend online conferences and webinars. By getting out and hearing what others have done and how they have innovated you will find new ways to grow revenue.




• Strengthen Your Case. Money is raised around a case for support. It can be tempting when times are tough to fall back on a message of need. “We need to raise $50,000.” But the better way is to clearly connect donors with the change you are creating in the community. If you don’t have a case for support write one. If you have one, revisit it and make sure that it is compelling, clear, concise, inspiring. Invest donors in the change you are creating.




• Clone Your Best Donors. When you are struggling to find new donors, go back to the source. Dig into your database to determine the characteristics (demographics and psychographics) of your best (most years of giving, biggest dollar, greatest upgrade) donors. Then survey them (formally or informally) to find out why they give, what messages resonate with them, what they read, where they get their information. You want to understand how they tick so that you can find others like them.




• Diversify Your Funds. When one revenue stream (or several) are down, you want to be able to draw on other streams. Are there other revenue streams you could launch or strengthen? Have you explored earned income? Could you grow your individual donor base? There are many ways to raise money and always potential for new avenues. Explore whether some of these make sense for your organization.

Things may be looking up, but it’s going to be awhile for the nonprofit sector. Instead of waiting around for a better economy, make some significant changes now to how you raise money. In so doing you’ll be turning this challenge into a tremendous opportunity for your organization.

Tags: case for support, cost of fundraising, fundraiser, nonprofit board of directors, nonprofit donors, nonprofit earned income, nonprofit fundraising, nonprofit fundraising events, nonprofit social media, nonprofit strategic plan

10 Great Social Innovation Reads: December

Although December was a “shorter” month because of the holidays, there was still much to read, particularly about what the new year might bring. Below are my 10 favorite reads from the past month, but as always, please tell me what I missed in the comments. And you can read other months’ 10 Great Reads lists here.

1. Since December was the last month of the year, there were lots of look back and look ahead posts. The PhilanTopic blog did a whole series of posts on 2011 Year in Review: What To Expect in 2012. And there is also 50 Economic Numbers from 2011 Too Crazy to Believe. And best of all, the Chronicle of Philanthropy launched a whole Outlook 2012 section of their site.




2. A follow up to the Money for Good report released a couple of years ago, the new Money for Good II report finds that donors would shift $15 billion to more effective nonprofits if they had better information. This is food for thought for the growing efforts (GuideStar, GiveWell, CharityNavigator, to name a few) to track and report on nonprofit results.




3. We are two years into the 5-year Social Innovation Fund experiment launched by the Obama Administration and what have we learned? Carla Javits from REDF and Lisa Jackson from New Profit, two recipients of SIF intermediary funding, offer their views.




4. From Capital Institute, an impassioned plea for foundations to make use of mission-related investments in order to tap into their (much larger) endowment assets and create even more social impact.




5. Rebecca Thomas and Rodney Christopher of the Nonprofit Finance Fund provide a fabulous description of how general operating support, capacity building grants and change capital differ in the nonprofit world. These are distinctions that every nonprofit leader should understand and employ.




6. A new group, Insight Labs in Chicago, provides nonprofits with a roomful of big thinking volunteers to hash out solutions to challenges the nonprofit is facing. Kind of a cool approach.




7. The Dowser blog profiles Project Interaction, a really interesting approach to educating kids. It is design thinking meets public education meets social problem solving. I love it.




8. Jessamyn Lau from the Peery Foundation writes a provocative post on their blog arguing that we need more patient changemakers in the social entrepreneurship field.




9. In the Stanford Social Innovation Review blog, Lisa Witter and Courtney Martin argue that we need to make a distinction between cultural and social entrepreneurship. Social entrepreneurship, they argue, changes markets and systems, whereas cultural entrepreneurship changes hearts and minds. Fascinating.




10. I always like finding a new “tell it like it is” blog, and so I was happy to find Nonprofit Nate, and his post Thank You For Your Trash, about how nonprofits need to take a step back and weigh the costs/benefits of in-kind gifts.

Photo Credit: Kenski1970

The Next Generation of Philanthropy: An Interview with Jessamyn Lau

In this month’s Social Velocity blog interview, we’re talking with Jessamyn Lau. As Program Leader of the innovative Peery Foundation, Jessamyn helps shape the foundation’s strategy, develops programs, strengthens the foundation’s portfolio, and supports existing grantees. Jessamyn’s MBA from Brigham Young University and time spent with Ashoka U have given her the perspective and skill-set to help the foundation develop new methods to support and build the field of social entrepreneurship. Jessamyn is currently working with BYU’s Ballard Center to create the Peery Social Entrepreneurship Program (PSEP), a cross campus initiative providing opportunities for students and faculty to engage with social entrepreneurship through curriculum, experiential learning, and research.

You can read past interviews in our Social Innovation Interview Series here.

Nell: At the Peery Foundation you have done some really interesting experiments with social media, even adding an element of crowd-sourcing via Twitter to your strategic planning process. But recently you have gone back and forth about whether you want to continue your PFWhiteboard blog. What has your thinking been about how social media fits into the overall work of the Peery Foundation?

Jessamyn: One thing we know about social media is that it’s a good tool for is spreading the word about our partners and their work. 90% of what we post/tweet is about our portfolio partners. Every now and then we try to figure out how else to deliberately use social media. We’ve tried stuff that hasn’t worked (so we stopped doing it), and we’ve tried stuff that did seem to yield value for us and others. In general it’s still throwing spaghetti at a wall and seeing what sticks. Intuitively we think social media is a good thing for our creativity, learning, and listening, however, we don’t feel tied to it as a core part of our strategy or practice. When it makes sense we use it, when it doesn’t we don’t.

Nell: What do you think holds foundations back from using social media and embracing greater transparency? What do you think will make that change?

Jessamyn: The tricky thing with social media is it’s really hard to link it to outcomes. Even when tangible examples of outcomes are illustrated it’s often a first-mover advantage and not something that will produce the same results if everyone did the same thing. If foundations could see how social media directly led to more impact it would be an easier sell. It’s a similar story with transparency. Being transparent requires change, time, dedication and a certain amount of risk. Without a clear and strong argument for how that leads to more impact it’s easier not to take the risk and stay quiet.

Another issue is strategic planning, which, at times, can become more of a bane than a boon to foundations. When it comes to social media many foundations think they need a strategy and a full blown plan before they will start using it. As with many things it’s hard to know exactly how Twitter or Facebook will be useful until you give it a go and play around a
little.

For the most part I think the change will only come with an increase of millennial philanthropists, foundation ED’s and program officers who come with a share-as-default mentality and bias towards creative experimentation in public.

Nell: You recently did a fascinating blog post about how the social entrepreneurship movement is encouraging young people to think they can solve the world’s problems, without much real world experience. How do we balance Generation Y’s zeal to find solutions with their youth and lack of experience?

Jessamyn: I don’t think I know the full answer to that, yet. My opinions on this point are still developing as the Peery Foundation works closely with BYU to build a cross-campus social entrepreneurship program. I’m not sure the overall problem is too much zeal or youth, or even too little experience -all of these things provide incredible value in the right context. I think what’s lacking are clearer expectations and support for students to build self-awareness and deliberate preparation in their development as social innovators. As I said, I’m still figuring it out -watch the PF Whiteboard over the coming months for more on this.

Nell: The Peery Foundation is one of few foundations that do mission-related investments. How did you decide to move into that realm and what do you think holds other foundation back from MRIs?

Jessamyn: Our primary function is to support and serve the social entrepreneurs we work with. We try to keep our funding as flexible as possible. Peery Foundation funding is generally unrestricted and the structure of a grant is often co-crafted with the entrepreneur. We have come to realize that entrepreneurs with differing business models, or at differing life-cycle stages, need different types of capital. Once we believe in a SE and their model for addressing poverty we want to always be open to providing the type of capital that they need at the time they need it.

We’re still at an early stage in developing our capacity to provide debt and other funding outside of philanthropy. In our philanthropic funding we’re not paper heavy and our agreements are very trust-based. It was definitely daunting to explore this new realm of traditional investment due diligence and contractual agreements. So far we’ve found the kind of support we need to help us make the leap fairly painlessly through the Toniic Network, and from sources such as Silicon Valley Community Foundation and University Impact Fund, and still feel like we’re able to retain our low-paper, trust based partnership approach to the extent that makes sense.

Nell: In some ways philanthropy has been a bit left behind by the impact investing movement. Why do you think that is and do you think philanthropic giving and impact investing will become more integrated?

Jessamyn: The potential of impact investing is huge, though I’m not sure I agree with the statement that impact investing (ii) has left behind philanthropy (charitable giving from individuals, corporations and foundations totaled over $290B in the US alone for 2010, impact investing is estimated at $50-100B in 2011). Though there is a lot of attention and discussion surrounding impact investing, there are still relatively few organizations actively channeling dollars to ii. Even in the future (when I think ii will absolutely eclipse philanthropy by the numbers), I see ii and philanthropy as very complimentary. In many cases philanthropic capital prepares the way for ii dollars, or continues to fund pieces of a model (overhead or continuing innovation) that ii capital can not.

Indeed, there are many incredibly efficient and effective models of social entrepreneurship with models not conducive to impact investment capital – they will probably always rely on philanthropic dollars. There will always be an important role for philanthropy to play. Philanthropy is the ultimate risk-taking capital. We should not lose sight of this or think that ii is here to replace philanthropy.

Tags: Ashoka U, impact investing, Jessamyn Lau, Mission-Related Investing, Peery Foundation, Peery Social Entrepreneurship Program, PFWhiteboard, Philanthropy, Silicon Valley Community Foundation, social entrepreneurs, social media, Toniic Network, University Impact Fund

10 Great Social Innovation Reads: November

November was another great month in the world of social innovation. Here is my pick of the top 10 posts, articles, graphics, and discussions. As always, please add your favorites from the month to the comments. And if you want to see a longer list of what catches my eye, follow me on Twitter @nedgington. You can also read past months’ 10 Great Reads lists here.

1. Some very interesting reports and predictions on how nonprofits and philanthropy are changing. First, the Philanthropic Ventures Foundation predicts a pretty exciting future for philanthropy. And Blackbaud released a report on what 35 experts think it will take to grow philanthropic giving in the US. And finally the 2011 Nonprofit Almanac is out. The annual report shows the nonprofit sector growing and that giving is back to 2000 levels




2. DC Central Kitchen founder and nonprofit sector advocate Robert Egger launched a new group called CForward to help nonprofits fight for their rightful place at the political table.




3. The Washington Post gets into the social innovation business by launching a new “On Giving” section to discuss philanthropy, social entrepreneurship, socially responsible business and much more.




4. The Nonprofit Finance Fund offers a great worksheet to assess a nonprofit’s strengths and weaknesses in order to link their financial health to their impact. Love it!




5. HubSpot offers a great infographic on pull vs. push marketing, but I’d argue it applies to fundraising as well.




6. The Alliance for Global Good is launching a $10 million fund to promote innovation in philanthropy. The new fund will “draw attention to charities that have found new approaches to tough problems and provide money to help them expand their work.”




7. On the Unsectored blog Jeff Raderstrong encourages us to start asking the right questions about the charitable deduction currently the focus of so much debate.




8. Always one to tell it like it is, Mario Morino from Venture Philanthropy Partners offers 6 Wrenching Questions Every Board Member Must Answer.




9. Jim Kucher argues on his blog that there is a bipolar disorder in social entrepreneurship, between the competing, and sometimes conflicting, social and business perspectives.




10. Tom Tierney, chairman of Bridgespan Group, a nonprofit consultancy, has written a paper, “The Donor-Grantee Trap, about the dangers of the nonprofit starvation cycle. In a recent interview about it, he argues “Nonprofits should be clear about their definition of success, articulate their strategy for achieving success and be up front about what that costs. That includes understanding the organization’s true overhead costs and making a case for funding good overhead.” Amen to that!

Photo Credit: Sim Van Gyseghem

Tags: charitable deduction, Nonprofit Almanac, nonprofit board members, nonprofit trends, Philanthropy, Social Enterprise, Social Entrepreneurship, social innovation

Financing Not Fundraising Webinar Series

Because of the popularity of the past two Financing Not Fundraising overview webinars in October and November, I’ve decided to launch a webinar series that breaks the Financing Not Fundraising concept into its various parts and expands on how to approach each element.

I will kick off this new webinar series in January with a new webinar each month. Some of the webinar topics will be:

• Creating a Financing Plan
• Finding Individual Donors
• Developing a Message of Social Impact
• Raising Capacity Capital
• Evaluating Earned Income
• Calculating the Cost of Fundraising
• Moving from Push to Pull
• Getting Your Board to Raise Money

If you want to find out when those webinars get scheduled in the new year, sign up for our the Social Velocity e-newsletter.

But in the meantime, if you want to get up to speed on the overall concept of Financing Not Fundraising, I’m doing one more overview Financing Not Fundraising webinar on December 6th.

This webinar, based on our popular Financing Not Fundraising ongoing blog series will show nonprofits what a broader approach to securing the overall financing necessary to create social change looks like, including:

• How to align your nonprofit’s mission with the money needed to deliver on it
• Why a message of impact results in more money
• Understanding the critical difference between revenue and capital
• Why overhead isn’t a dirty word anymore
• How and why to calculate the net revenue of money raising activities
• When to explore new revenue streams

If you’ve been following the Social Velocity Financing Not Fundraising blog series and you want to learn more, or if the series has brought up some burning questions that you’d like to have answered, join us for this interactive webinar.

If your staff, your board, and your donors are worn out, rest assured, there is a better way. Join this webinar to find out how. I hope to see you there!

Financing Not Fundraising: Rethinking How Nonprofits Bring Money in the Door
Tuesday, December 6, 2011
12:00 PM – 1:00 PM (Eastern Time)
$40.00
Register Now

Tags: board fundraising, capacity capital, financing not fundraising, individual donors, nonprofit earned income, nonprofit fundraising, philanthropic equity, social impact

10 Great Social Innovation Reads: October

I think it gets harder and harder every month to narrow down to a list of only 10 great reads in social innovation. October was no exception. Here are my top 10 of the last month (but actually more like 13 if you’re counting). As always, please add what I missed to the comments. And if you want to see the expanded list of what catches my eye, follow me on Twitter @nedgington.

You can also read the lists of Great Reads from previous months here.

1. Marketing is a brave new world these days, and so is fundraising. Replace “customer” with “donor” and “We’re All Marketers Now” from McKinsey Quarterly applies to nonprofits as well.




2. A new Chronicle of Philanthropy blog launched recently that focuses on innovation in the nonprofit world. One of the first posts is about how the U.S. Army’s practice of using a “devil’s advocate” in their decision-making processes is something that some philanthropists are copying in order to come up with better solutions.




3. Occupy Wall Street and the other protests in cities around the country was a big topic this month. Some of the most interesting were Who are the 99 percent?  from Ezra Klein in The Washington Post  and The Demographics of Occupy Wall Street from Fast Company.




4. From the Harvard Business Review blog comes an argument that I completely agree with. Nonprofits that are struggling lack a “strategy for connecting their mission with their ability to deliver.”




5. I know infographics are becoming overused, but this one is pretty cool: How the Top 50 Nonprofits Do Social Media.




6. And speaking of the top nonprofits, the Chronicle of Philanthropy’s Philanthropy 400 is out, all about what the 400 wealthiest nonprofits are up to.




7. The Alliance for Children and Families, a membership group for human-service charities, released a new report identifying the emerging trends social service organizations must embrace in order to succeed.




8. If you missed the live-streaming from the White House last week on social impact bonds, Pay for Success: Investing in What Works, you can still watch archived recordings, or check out the Nonprofit Finance Fund’s great resources on the topic here.




9. As usual, Lucy Bernholz tells it like it is, in her argument that the current debate in American politics about shifting more of the burden of funding for core public services to private philanthropy is undemocratic.




10. Jennifer Landres from the Center for High Impact Philanthropy finds some lessons for philanthropy in the movie “Moneyball.”

Photo Credit: JeffersonDavis

Tags: Fundraising, nonprofit innovation, nonprofit social media, Occupy Wall Street, Philanthropy, social impact bonds, social service charities