Follow Social Velocity on Google Plus Follow Social Velocity on Facebook Follow Nell Edgington on Twitter Follow SocialVelocity on Linked In View the Social Velocity YouTube Channel Get the Social Velocity RSS Feed

Download a free Financing Not Fundraising e-book when you sign up for email updates from Social Velocity.


Charting a Nonprofit’s Future Direction: A Case Study

Engaging News ProjectI guess I am on a case study kick this week. I do think that actual examples of the paths other nonprofits followed in order to become more effective or more sustainable can be really helpful to other nonprofit leaders in the trenches. So in that spirit, I offer a case study of a small, startup nonprofit ready to grow their impact and their sustainability.

The thing I love about my job the most is that I get to work one-on-one with super smart people who are coming up with innovative solutions to making the world a better place. In particular, lately I’ve been lucky enough to work with some groups in the civic technology space, a really exciting emerging area where innovative technology solutions are used to make government, and ultimately democracy, more effective.

One of these groups, The Engaging News Project (ENP) is a startup nonprofit aimed at helping news organizations better meet their democratic and business goals in a digital age.

While ENP enjoyed success and the support of some key funders over the past two years, they were ready to move from the project phase to an established organization with sustainable funding and a long-term strategy for achieving impact on the digital news industry.

So ENP hired me to lead their strategic planning effort. With my guidance, ENP created an advisory group of staff and key stakeholders. I led the group to analyze the external environment in which ENP operates, develop their theory of change, define the audiences they want to target, and articulate the goals and objectives and corresponding financial projections of the next 3 years for the organization. I also helped staff create a year 1 operational plan to help execute and monitor the strategic plan.

The end result was a clear 3-year strategic plan with accompanying financial model and an engaged and excited staff and group of advisors.

Because of their new strategic plan, ENP has focused their project development efforts, clearly defined where and with whom they want to work, and detailed their goals for the next 3-years.

They are now working to implement the strategic plan. They are identifying new funders to help support the growth of the organization, expanding their collaborative partners, creating a formal advisory board, and streamlining operations. ENP staff are excited about the new direction and are actively working to have a greater impact on the future of digital news.

As Talia Stroud, Director of the Engaging News Project put it,

As a new entity, we had been doing more of the day-to-day work and hadn’t taken the time to think about the bigger picture of where the Engaging News Project was headed and how to get there. Social Velocity helped us to chart a future direction, hone our messaging, and develop a clear plan for our organization. By working with us to figure out our targets, potential collaborators, and goals, Social Velocity helped us to systematically figure out a strong path forward. I can’t wait to see what we’ll be able to accomplish with these plans in place.

I’m excited to see where the Engaging News Project goes from here and the growing impact they will have on our democracy.

Photo Credit: Engaging News Project


Tags: , , , , , , , , ,

What Nonprofits Don’t Get About Marketing

nonprofit marketingIn the nonprofit world marketing is fairly misunderstood. “Marketing” is the act of segmenting the potential market for your products or services and then targeting the right segment(s) in order to convince them to “buy.” While in the for-profit world there is typically just one customer, in the nonprofit world there are (at least) two distinct customer groups:

  • Those benefitting from your products or services (“Clients”) and
  • Those buying your products or services (“Funders”)

Often, marketing to Clients is less tricky because demand is so high for a nonprofit’s services. So the real challenge is to create an effective marketing strategy to attract Funders. But even within that category there can be many different types, depending on a particular nonprofit’s business model. Marketing to foundations vs. individuals vs. earned income customers vs. government contractors — it can get quite complex.

Which is why it is so important for nonprofit leaders to understand some basics about how marketing works.

You Must Know Who You Are Marketing To
Market segmentation is thinking strategically about which specific people you are trying to reach within the vast universe. Anyone who has money should NOT be the target of your nonprofit’s fundraising efforts. Instead, you have to think about what distinguishes people who have an affinity for your work from the rest of the world. Clearly define their particular demographic (age, gender, income, job)  and psychographic (lifestyle, interests, attitudes) characteristics. Create some “target personas” (HubSpot has a great tool for this) that define your target group(s) along different dimensions and then tailor your marketing efforts to where they are and what specific messages will compel them to act.

There’s No Such Thing as “Raising Awareness”
I can’t tell you how many times I’ve heard a nonprofit leader say that they are holding an event, or trying to generate media coverage, or sending out a mailer in order to “raise awareness.” Let me be blunt — that phrase is meaningless. Whose attention (specifically) are you trying to capture (see #1 above)? And are you trying to get their attention in the places they already are? And are you talking with them in a way that is meaningful and will encourage them to act? When you attempt to “raise awareness” without a specific and targeted strategy you are just shouting in the wind.

The Market Is Increasingly Crowded
And now more than ever you are shouting in the wind because of the rapidly changing digital environment in which we all live. We are bombarded with an exponentially increasing amount of messages every day. It is completely overwhelming. So unless you get really specific about who exactly you are trying to reach and how exactly you are going to compel them to act (again, see #1 above), you are hopelessly lost.

Push Marketing is Dead
And because of this rapidly changing digital environment, push marketing — the traditional approach of sending out a press release, putting an ad in the paper, sending a direct mail piece, or any other way you PUSH out a message and hope people will act — has become completely ineffective. Instead you want to use PULL activities where you create and participate in communities where your target personas are already present. You connect with them, empower them to get involved and then let them tap into their own networks to help your jointly held cause.

You Must Embrace The Network
In the end you must create a completely different philosophy about marketing. Stop creating your mission in a vacuum and then begging for any and all support to make it happen. Instead, you must break down the walls of your organization and tap into networks outside that have similar social change goals and who can work with you to make that change happen. Rather than investing in an advertising campaign, use those resources to create a network strategy to identify key influencers who can help move your goals forward and connect with them to figure out how you can work together. We live in an increasingly networked world and only those who connect with it will thrive.

You must reinvent your marketing approach. Instead of shouting a message and hoping someone will listen, get strategic about identifying people who can become partners in making a joint social change vision happen.

Photo Credit:

Tags: , , , , , , , , , ,

10 Great Social Innovation Reads: July & Aug 2015

social innovationSince 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.

To see a longer list, follow me on Twitter, Facebook, Google+ or LinkedIn. And you can see past months’ 10 Great Reads lists here.

  1. 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.

  2. 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.

  3. 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.

  4. 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.”

  5. 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.

  6. 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.

  7. 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.

  8. 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.

  9. 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.”

  10. 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

Tags: , , , , , , , , , , , ,

Guest Post: Nonprofits Must Be Able to Adapt

antony bugg-levineNote: 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.”

Measure outcomes.
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.


Tags: , , , , , , , ,

Guest Post: What Funders and Nonprofits Can Do To Solve the Sector’s Talent Troubles

kathy reichNote: As I mentioned earlier, I am taking a few weeks away from the blog to relax and reconnect with the world outside of social change. But I am leaving you in the incredibly capable hands of a rockstar set of guest bloggers. Next up is Kathy Reich. Kathy is Organizational Effectiveness and Philanthropy Director at the David and Lucile Packard Foundation where she helps grantees improve their strategy, leadership, and impact. Here is her guest post… 

Philanthropy pundits often exhort nonprofits to “act more like businesses.” Usually I disagree; in fact, I think there’s a great deal that businesses could stand to learn from nonprofits.

In at least one area, though, I admit that all too frequently nonprofits lag their for-profit peers. Nonprofits simply do not invest enough time or money in talent assessment, development, and management.

Major national surveys provide a helpful snapshot of the nonprofit sector’s talent troubles. In the Bridgespan Group’s Nonprofit Management Tools and Trends 2014 survey, which polled almost 500 nonprofit organizations about their current management practices, nearly 60 percent of respondents agreed or strongly agreed that “hiring, training, and retaining staff is one of our greatest challenges.” Yet the survey found that only 40 percent reported using talent assessment and development tools, and just 38 percent said their organizations engage in leadership succession planning.

Similarly, in the Nonprofit Finance Fund’s 2015 State of the Nonprofit Sector survey, which included responses from more than 5,400 nonprofits nationwide, respondents were asked to name the top three challenges facing their organizations. “Ability to offer competitive staff pay and/or retain staff” was ranked in the top three by fully 25% of the respondents, behind only “achieving long-term financial sustainability” as one of the top three challenges facing nonprofits. Yet the same survey found that just 37 percent of respondents had invested money or time in staff professional development in the past year. Only 28 percent had given cost-of-living raises, and 18 percent had given raises beyond COLA.

At the Packard Foundation, program officers tell me that they see signs of this underinvestment almost every day. Some problems that our nonprofit grantee partners routinely report:

  • Executive turnover is frequent, and often traumatic.

  • Nonprofits have a hard time finding appropriate candidates for senior management roles, including CEO, program executives, development directors, and communications directors.

  • The leadership many nonprofits have is not reflective of the leadership that they need, or the communities they serve. In most of the fields in which the Packard Foundation works, nonprofit leadership remains predominantly white, male, and middle-aged, even as our country becomes younger, more diverse, and hopefully, more committed to racial and gender equity.

  • Emerging leaders under age 45 report high levels of career dissatisfaction, driven in part by lack of professional development and advancement opportunities. In a 2011 Young Nonprofit Professionals Network survey, only 36 percent of respondents said that their organization invested in “bench strength” to develop emerging leadership. Of that group, less than 47 percent said their organization implemented these investments effectively.

Nonprofits and foundations both have critical roles to play in ensuring that the nonprofit sector has a robust, diverse talent pipeline now and in the future. First, foundations need to step up their financial support for leadership. The private sector spends $12 billion annually, an average of $120 per employee, on developing leaders, investing in their management and technical skills so that they can move up the ranks or excel in their current jobs. In contrast, philanthropy’s investment in nonprofit leadership development totals an average of $29 per employee annually.

Foundations can do much more. Some concrete ways that they can help:

  • Fund nonprofit overhead so that nonprofits have enough money to pay their people competitively and can have the operations in place necessary to support their staff and manage their talent. Depending on their size and talent needs, some nonprofits may need to hire a Chief Operating Officer, a Human Resources Director, or a Chief Talent Officer.

  • Support nonprofits to develop “right-sized” performance assessment and management systems, as well as meaningful succession plans for key leaders.

  • Include funds for staff professional and leadership development in project support grants.

  • Incentivize nonprofits to develop cultural competency in hiring and management so that they can attract and retain diverse employees.

But foundations cannot tackle this issue alone. No matter what their size, nonprofit boards and executive leadership need to focus on talent issues and ensure they have appropriate plans in place to manage and develop staff for their organizations. They need to implement thoughtful, intentional strategies and process to ensure that they are identifying their own talent needs, assessing the strengths and growth areas of their staff, and providing ongoing development and feedback to all employees, particularly those with high growth potential. And they need to make the case for talent to their funders, along with concrete examples of how investing in leadership capacity will improve outcomes.

In the nonprofit sector, as in business, leadership matters. Let’s be sure we’re all investing our time, and our money, where it counts.

Tags: , , , , , ,

Guest Post: Is Maximizing Returns the Right Approach for Foundation Endowments?

phil buchananNote: As I mentioned earlier, I am taking a few weeks away from the blog to relax and reconnect with the world outside of social change. But I am leaving you in the incredibly capable hands of a rockstar set of guest bloggers. Next up is Phil Buchanan, President of the Center for Effective Philanthropy (CEP), the leading provider of data and insight on foundation effectiveness. He is also a columnist for The Chronicle of Philanthropy and a frequent blogger for the excellent CEP Blog. Here is his guest post…

When it comes to the debate about the social impact of endowment investments, college and university campuses – not foundations – seem to be where the action is. Foundations have hundreds of billions of dollars in assets but, today, most of the large ones appear to be placing no restrictions whatsoever on how their endowments are invested.

Divestment is hardly a new issue, of course. In the late 1980s, when I was deciding where to go to college, many campuses were racked by a heated debate over divestment from companies doing business in apartheid South Africa. In the 1990s, the issue was divestment from tobacco companies. Today, a similar debate is playing out over fossil fuels, for-profit prison companies, and other investments

True, most college boards are still refusing to limit their investment options much, if at all. From what I understand, the arguments against divestment that get made in college and university – as well as foundation – boardrooms include that divestment doesn’t accomplish anything, that it’s a board’s fiduciary duty to maximize returns, and that ruling out some investments risks a slippery slope in which an increasing number of industries are ruled out for moral reasons.

But it’s a very live issue in higher education and some institutions are, in fact, drawing boundaries around how their endowments can be invested. They are deciding — usually after sustained student and faculty pressure — that their monies should not support certain industries.

Stanford University divested from coal companies in 2014 and, this year, Syracuse University divested entirely from fossil fuels. “Syracuse has a long record of supporting responsible environmental stewardship and good corporate citizenship, and we want to continue that record,” said the school’s Chancellor. “Formalizing our commitment to not invest directly in fossil fuels is one more way we do that.”

Earlier this summer, Columbia University made headlines as the first college or university to divest from the for-profit prison industry, following a student campaign. “This action occurs within the larger, ongoing discussion of the issue of mass incarceration that concerns citizens from across the ideological spectrum,” read a University statement. 

But what about private foundation endowments — which Foundation Center estimates to be some $580 billion in total? Rockefeller Brothers Fund (RBF) received a lot of attention last fall with its decision to divest from fossil fuels. Was this decision part of a larger movement among funders?

Evidently not, or at least not yet, as the Center for Effective Philanthropy (CEP), the organization I lead, reported in Investing and Social Impact: Practices of Private Foundations. (The report was released in May and is based on a benchmarking survey of private foundations making at least $10 million in grants annually.) RBF is one of very few larger foundations to divest from fossil fuels, or from anything, for that matter — at least so-far. More than 80 percent of the 60 foundations that responded to this portion of our data collection effort said they screen nothing — not fossil fuel companies, tobacco companies, for-profit prisons, or anything else — out of their endowment investments.

Of the small proportion that do some screening, most exclude tobacco companies. Just three have divested their endowments from fossil fuels.

Time will tell whether the decision of RBF and a few others — and the accompanying publicity — will lead more foundations to reflect and then take this step. Of course, large foundations don’t face the kind of pressures colleges do — sit-ins by students, faculty votes, or pledges from alumni to withhold donations, for example.

Still, given all the discussion about aligning investing decisions and the pursuit of social impact, I was surprised how few foundations have placed any restrictions at all on their investments. I have spoken with some foundation CEOs and board members who make an impassioned argument that to do so would be irresponsible and pointless. Interestingly, though, few seem willing to make this argument against connecting investment decisions to social impact publicly.

On the other end of the spectrum in this debate is Clara Miller, president of the FB Heron Foundation, which invests “all our assets for mission.” Miller, who is quite comfortable making her case publicly, argues that foundations are doing “impact investing” whether they know it or not. “Foundations are investing 100 percent of their assets for impact; they just don’t know whether it’s positive or negative,” she said in this CEP conference session in May. “We have a duty of obedience to mission. And that applies to all of our assets.”

Wherever you come down on this debate, it’s probably fairly easy to agree that it’s an important one. I hope foundation boards will engage it.

Tags: , , , , , , , , , ,

Guest Post: An Emergent Approach to Philanthropic Strategy

Kelly Born Note: As I mentioned earlier, I am taking a few weeks away from the blog to relax and reconnect with the world outside of social change. But I am leaving you in the incredibly capable hands of a rockstar set of guest bloggers. Next up is Kelly Born, program officer at the Hewlett Foundation working on their Madison Initiative, which focuses on reducing today’s politically polarized environment. Kelly also writes for the always thoughtful Hewlett Foundation blog. Here is her guest post…

In March of 2014, the William and Flora Hewlett Foundation launched a new initiative focused on US democracy reform, The Madison Initiative. The overarching goal is to “help create the conditions in which Congress and its members can deliberate, negotiate, and compromise in ways that work for more Americans.”

Our mandate is for a 3-year, exploratory initiative to assess whether and how the Foundation might be able to make a difference here. During this period, we are focused on three central questions:

  1. Are there solutions and approaches that are worth pursuing?
  2. Is there ample grantee capacity to pursue these ideas (or can we help build it)?
  3. Are there funding partners we can work with to make it happen?

In exploring this problem of congressional dysfunction we realized early on that, unfortunately, there don’t appear to be any silver-bullets that will solve this problem – it’s not as if campaign finance reform, nonpartisan redistricting, or increased voter turnout, taken on their own, would resolve our current democratic ails (even setting aside for the moment how hard it would be to actually achieve these changes!).

Regrettably, there is no clear consensus on what to do to improve the system, much less on how to do it. This may be, in part, why Inside Philanthropy awarded The Madison Initiative with 2014’s Big Foundation Bet Most Likely to Fail. Given this, our view has been that current congressional dysfunction is occurring in a system of systems (and sub-systems) that are interacting in complicated ways.

Early on we decided to develop a systems map rather than a theory of change to guide our work (working in close partnership with the Center for Evaluation Innovation and Kumu, collaborations we’ve written a bit about here). Theories of change typically outline desired (social or environmental) outcomes and then map backwards, linearly, to the activities and inputs necessary to achieve those outcomes. Systems maps are perhaps better suited for more complex, uncertain environments like democracy reform, where cause-and-effect relationships can be entangled and mutually reinforcing, rather than unidirectional.

Version 1.0 of our map includes more than 35 variables we believe are contributing to the problem, distributed across three key domains: Congress, Campaigns and Elections, and Citizens. In light of this complexity, rather than making an initial set of big bets on a few key variables, we have instead spread a series of smaller bets within these systems to see where grantees might gain traction, and what this reveals about the system’s more confounding parts.

The benefits of this approach are many – in fact, I cannot imagine effectively tackling this particular problem any other way. But employing this spread betting approach also involves a few challenges for us at Hewlett, and for our partners and grantees. The trade-offs are worth considering:

  • We are acknowledging and respecting complexity, but this can sow seeds of confusion for our partners. Our approach has the essential benefit of taking into account the systemic complexity and interdependency of what we are trying to help change. We are avoiding over-simplifying and thereby misconstruing our reality (a good thing). But we are exploring more than 35 variables (ranging from deteriorating bipartisan relationships to the proliferation of partisan news media), with more than 60 active grantees. This approach can be hard to manage, and harder still to convey to others – especially anyone accustomed to a more linear and readily understandable theory of change.

  • Our course correcting helps us learn, but has a real impact on partners. As we diversify our investments to learn more about what works, we will continue to learn more about which efforts are having the most impact on congressional dysfunction, and which are less germane to the problem. As we do, we will necessarily converge (and double down) on a few core interventions, while discontinuing others. This will mean disappointing organizations that we respect and had supported at the outset – an inevitable byproduct of this approach, but unpleasant for all involved.

  • Our evidence-based approach risks coming off as overly academic. We are determined to avoid investing in solutions where there is not solid evidence to support their viability vis-à-vis our goals. This helps us avoid squandering funds on interventions that won’t, ultimately, work. But this approach also runs the risk of coming across as standoffish, academic, and idiosyncratic in the eyes of a practitioner-driven field that in some instances may be pursuing work that is harder to (or has yet to be) substantiated by solid research.

We’ve certainly got our work cut out for us. But we deeply believe that the social sector shouldn’t shy away from complex problems. We also believe that the benefits of this approach far outweigh the costs. It enables broad-based learning, and truly forces us to constantly re-think the grants we are making. Building in these tough choices, rather than forging ahead with a pre-defined strategy, requires that we not just learn, but that we act on what we discover. And fast.

In short, while beset by a few real challenges, we’re convinced that an emergent path is the best path forward. Surely we will place some wrong bets along the way. But, as a favorite colleague of mine often says, “it’s not like we’re selling cigarettes to children.” All of our grantees are doing great work – ultimately it will (not so simply) be a question of which of these lines of work is most likely to improve Congress.

In 2017, we will go back to our Board of Directors to discuss whether and how The Madison Initiative’s work will continue. In the meantime, we would love to hear how other funders have approached emergent problems like this – and how nonprofits might advise that we manage these inherent challenges as we progress?

Tags: , , , , , , , , ,

Building Demand For Impact Measurement: An Interview with Tris Lumley

Tris LumleyIn today’s Social Velocity interview, I’m talking with Tris Lumley.

Tris is Director of Development for New Philanthropy Capital (NPC), a U.K. think tank and consultancy that works with both nonprofits and funders. Tris focuses on both the demand and supply sides of innovation around social impact. His particular interest is putting impact at the heart of the social sector, including shared measurement, open data and systems thinking. He helped initiate, and now coordinates, the Inspiring Impact program which aims to embed impact measurement across the UK charity sector by 2022. He is also a trustee of the Social Impact Analysts Association, a member of the EU GECES subgroup on impact measurement in social enterprise, and the Leap of Reason Ambassadors Community.

Nell: A big focus of your work at NPC is making impact measurement ubiquitous in the UK’s nonprofit sector. How far is there to go and how does the UK compare to the US in impact measurement being a norm?

Tris: There’s undoubtedly been significant progress over the last decade on impact measurement in the UK, and NPC has been at the heart of that. There are several ways in which that progress is visible, as well as in the sector level surveys NPC has done to track change. For example, most charities say that they have invested more in impact measurement in the last five years, and as a result we see that it is increasingly the norm for charities to have a defined theory of change, a role within the organisation to lead on impact measurement, and to talk about their impact measurement efforts in their public reporting. Most institutional funders also say that they look for evidence of charities’ impact measurement efforts in their funding decisions. Demand for measurement advice is growing, and the impact measurement industry is growing in response – there are more consultants offering services in this area.

The growth of social (or impact) investing has also driven greater interest in impact measurement. The industry as a whole acknowledges the centrality of impact measurement and the need for social returns to be as well evidenced as financial returns. There have been a number of key developments to move the field forward here, from Big Society Capital’s outcomes matrix to the G8 Social Impact Investment Taskforce and European GECES reports and guidance on impact measurement – all of which NPC has helped to deliver.

What’s not as clear is how much progress there’s been on the use of impact measurement, rather than its mere existence. When NPC repeats our field level state of the sector research in 2016, we’ll be asking a number of questions to tease out whether impact measurement activity is leading to use of impact evidence in decision-making – whether it’s becoming embedded in practice.

My concern is that we don’t see the signs that impact measurement is driving learning, improvement, decision-making or wholesale shifts in allocating resources towards higher impact interventions, programmes and organisations. It feels like impact measurement is something that everyone acknowledges we need to do, but few have worked out how to use. With the result that it’s bolted on to the reality of organisations delivering services and raising funding, but not embedded at the core.

A few examples of what I mean: if impact measurement were driving learning, I’d expect to see lots of organisations sharing their insights on success and failure, and learning from each other. I’d expect to see common measurement frameworks which allow organisations to understand their relative performance. These are still very rare. I’d also expect to see investment by funders and investors in the infrastructure that we know is needed for learning – journals, online forums and repositories and practitioner networks. There are some emerging examples of these, like the What Works Centres, but they’re still mostly just getting off the drawing board.

Most importantly I’d expect to see charities adjusting strategies and programmes in response to their learning. Maybe I’m not looking in the right places, but the examples I do see are the exception, not the norm.

When it comes to comparing the UK and US, it’s really hard. We don’t have comparable field-level studies, and we need to work together more closely on these if we want robust insights. For example, if you compare the findings in NPC’s 2012 paper with a recent US study it looks like nonprofits are more likely to say the main purpose of impact measurement is learning and improvement. But actually we don’t know if this is the result of the questions we asked and how we asked them.

In both the US and the UK, it’s clear that the rhetoric on impact measurement has advanced over the last decade. What’s not yet clear is how the reality underlying that has shifted.

Nell: While there are many similarities between the US and UK nonprofit sectors there are some fundamental differences, in particular views about how much government (vs. private charity) should do for public welfare. How does the UK’s view of government’s role help or hurt the capacity building efforts of nonprofits?

Tris: The UK government has taken on a leading role in the social investment space, and it’s here that efforts to build capacity are most visible. Investment readiness programmes have been introduced over the past few years to build general capacity to access social investment. More recently, impact readiness programmes have arrived to do the same for impact measurement capacity. NPC has been working within these programmes to help a number of charities, and cohorts of charities, and it’s clear that they can play a major role in helping the sector to improve. But capacity-building in general has felt the effects of austerity just as much as any other area of government funding. Perhaps more so, as limited funds are increasingly focused on service delivery, not on efforts to improve services.

When NPC repeats its survey of the field, I am certain that we’ll find that limited funding to develop impact measurement capacity is still the major barrier cited by charities. It doesn’t look like anything’s going to change that any time soon.

Nell: NPC works at the nexus between nonprofits and funders, helping the two groups to understand and adopt impact measurement. In the US few funders will fund impact measurement systems, even though they want the data. How does NPC work to convince funders of the need for investments in measurement (among other capacity building investments)? What progress have you seen and what’s necessary for similar progress to happen in the US?

Tris: While a proportion of funders have for a long time supported evaluation, the majority still don’t. We’ve worked through programmes like Inspiring Impact (a sector-level collaborative programme to help embed impact measurement) with a group of funders to develop principles, and help them to embed support for impact measurement in their practice. These efforts can help those who already see the benefit of capacity-building to advance their work, but it’s tough to engage those who aren’t already thinking in this way. I think that the leap we need to make is to selling impact measurement through its benefits, by showing how organisations improve, and their impact increases, as a result. And because impact measurement isn’t yet typically embedded in organisations, those benefits aren’t as evident as they should be.

What does seem to work well is trying to get funders and charities to work together in a specific outcome area to make progress, rather than making a general case for impact measurement. Cohort capacity-building programmes, learning forums and shared measurement initiatives are all part of this. The key thing here is that then the funder is committed to the outcomes everyone’s working towards, and impact measurement becomes a tool for everyone to achieve those outcomes together.

Nell: You are part of the Leap Ambassador Community that recently released the Performance Imperative. Have you seen similar interest groups forming around these issues in the UK? And what role do you think interest groups like these play in a norm shift for the sector?

I have been privileged to be part of this amazing community of leaders, and one of a minority initially from outside the US. I’m convinced we need a similar movement here in the UK, and globally and have been discussing whether and how to approach this with the group from the start. And as co-Chair of Social Value International – a network of those working in the social impact field, I’m part of an effort to do this at the practitioner level too.

The Leap Ambassadors Community brings a human face to what is often seen as a technical subject. After 11 years of working in the social impact field, I am convinced that we cannot sell impact measurement just by increasing the supply of good technical solutions. We need a movement to build the demand for those solutions. We need the right frameworks to measure impact and manage performance. But we need the leaders to demand them, and to harness them to hold themselves accountable, learn and improve, and share what they find.

Photo Credit: NPC

Tags: , , , , , , , , ,


Popular Posts

Search the Social Velocity Blog