10 Great Social Innovation Reads: March 2013

Perhaps it had something to do with the SXSW Interactive conference last month, but March was all about using technology in interesting ways to further social change. From crowdfunding, to a new giving graph, to credit card donations to the homeless, to engaging people in the arts and beyond, people are experimenting with technology for social change in really exciting ways.

Below are my 10 favorite social innovation reads in March. But let me know in the comments what I missed. And if you want to see my expanded list, follow me on Twitter, Facebook, LinkedIn, Pinterest or ScoopIt.

You can see the 10 Great Reads lists from past months here.

1. Crowdfunding is quickly becoming the hot new thing in the social change world. It remains to be seen if it is a game changer, but in the meantime take a look at some examples of how its being used here, here, and here. And while we’re talking about innovative use of technology to fundraise, Lucy Bernholz dissects some new efforts to donate to the homeless via a credit card.




2. Writing on the ArtsFwd blog, Anna Prushinskaya describes how some innovative arts organizations have used social media to effectively engage audiences in new ways.




3. I’m really excited about a new technology the Case Foundation is developing that will map your online search preferences to giving suggestions just like Google, Facebook and others currently use your search preferences to suggest products and services. (I’ll be interviewing the mastermind behind this, Will Grana, on the blog this summer).




4. I love to see nonprofits using new media (like video and infographics) to tell their story. Beth Kanter offers some easy tips for creating infographics. And speaking of cool infographics, check out this one on why slacktivists are more active than you think.




5. It seems “scale,” the social innovation buzzword of a few years back, is being redefined. Kathleen Enright, CEO of Grantmakers for Effective Organizations, describes a new report that expands the idea of scale and offers ways grantmakers can support it.  And Ben Mangan, CEO of nonprofit EARN, spurs nonprofits and funders to move past “stifling incrementalism” and start working towards real scale.




6. Dan Pallotta ruffled some feathers, as is his way, with his TED Talk this month The Way We Think About Charity is Dead Wrong, and there were several responses. But I thought the most thought-provoking was from a group of professors from Boston who suggest that Pallotta’s argument that nonprofit salaries are too low only reinforces the wealth inequality of the American economy.




7. And on a related note, Dione Alexander, writing on the Mission and Money blog, explains increasing wealth inequality as a kind of bullying, noting “The social contract through which we assume shared responsibility for the community is broken.”




8. And since we are on the topic, this video about wealth inequality in America blew my mind. If you want a quick and dirty view of where America’s money goes, take a look.




9. As part of the ten year anniversary of the Stanford Social Innovation Review, Matthew Forti looks back at the past ten years of measuring nonprofit outcomes, the good, bad and the ugly.




10. Writing in the Duke Chronicle, Trinity senior Elena Botella argues that deciding when a public service should be privatized should be based on evidence, as she says “Humans respond to a profit motive, but we also respond to altruism, community values, prestige and pride in our work.”

Photo Credit: mendhak

Tags: Beth Kanter, Case Foundation, crowdfunding, Dan Pallotta, EARN, Foundations, giving graph, Grantmakers for Effective Organizations, Lucy Bernholz, nonprofit fundraising, nonprofit infographics, nonprofit salaries, nonprofit scale, nonprofit social media, social change, Social Entrepreneurship, social innovation, social media and the arts, SXSW Interactive, wealth inequality

The State of the Nonprofit Sector in 2013

The Nonprofit Finance Fund (NFF) today released the results of their fifth annual State of the Nonprofit Sector survey. This year almost 6,000 nonprofits responded and the results point to a nonprofit sector that is shifting fundamentally, where traditional funding sources (like government dollars) are shrinking, while demand for services is increasing. Nonprofit leaders must adapt their business models in order to keep up.

As NFF CEO Antony Bugg-Levine put it:

Nonprofits are changing the way they do business because they have to: government funding is not returning to pre-recession levels, philanthropic dollars are limited, and demand for critical services has climbed dramatically. At the same time, 56 percent of nonprofits plan to increase the number of people served. That goal requires systemic change and innovation– both within the sector, and more broadly as a society that values justice, progress and economic opportunity.

With demand increasing and traditional resources drying up, something has got to give. Nonprofits are finding that they must get more strategic about using money and determining the impact of their work.

Some of the most interesting findings from the 2013 survey are:

• 42% of survey respondents report that they do not have the right mix of financial resources to thrive and be effective in the next 3 years.
• Over the next twelve months, 39% plan to change the main ways they raise and spend money.
• 23% will seek funding other than grants or contracts, such as loans or investments.
• For the first time in the five years of the survey, more than half (52%) of respondents were unable to meet demand for their services last year (up from 44% in 2009), and 54% say they won’t be able to meet demand this current year.

As one survey respondent put it, it is time to move from the reactive to the strategic:

Our greatest challenge is financial stability and sustainability. We must be more effective to raise 50% more money than we did two years ago—with the same number of staff members, but using all the skills and talents each staff member brings to the table to maximize our efforts. Our budget is to the bone, and our staff is overstretched….We…must learn how to work proactively and strategically… and stop playing catch up, as we have for most of our existence.

Because NFF has  been doing this survey for the past 5 years they can start to look at trends over time. They’ve developed a pretty cool Survey Analyzer Tool that lets you slice and dice the data by geography, sector, budget, and more.

I encourage you to dig in and take a look at the data. You can find all of the survey reports and tools at the Nonprofit Finance Fund website here.

Photo Credit: Nonprofit Finance Fund

Tags: Antony Bugg-Levine, government funding of nonprofits, Nonprofit Finance Fund, nonprofit finances, nonprofit fundraising, nonprofit impact, nonprofit outcomes, nonprofit planning, nonprofit strategy, State of the Sector Survey

Lincoln the Social Change Leader

Today we celebrate President’s Day and one of our greatest presidents, Abraham Lincoln. We were reminded of Lincoln’s incredible leadership, wisdom and courage to make real change this past Fall when the movie Lincoln came out. The movie chronicles a very specific period in history when Lincoln led an unpopular effort to pass the 13th amendment to the constitution outlawing slavery. His decision to force the end of slavery as the Civil War was drawing to a close was not a political one, in fact it was politically very unwise. Yet he believed deeply that it was the right action at the right time for our country.

In this clip from the movie he talks about Euclid’s ideas about geometric equality as a metaphor for human equality and the need for the end of slavery.

As a true leader, Lincoln did what was right, not what was easy. If you haven’t seen the movie, I highly recommend it. It demonstrates what true social change leadership looks like. Lincoln had a passionate vision for change and had the courage, strength and tenacity to bring it to fruition. He is a model for us all.

Tags: 13th Amendment, Abraham Lincoln, Lincoln movie, social change, social entrepreneur

Who Should I Interview Next?

I’ve been doing the monthly Social Velocity Blog Interview for 2 1/2 years now and have talked with more than thirty inspiring leaders in the world of social innovation. But now I need your help.

Over the last few years, I’ve interviewed

• Social investment gurus like Kevin Jones, Antony Bugg-Levine and George Overholser
• Philanthropic thought leaders like Phil Buchanan, Lucy Bernholz, Clara Miller and Sean Stannard-Stockton
• Nonprofit leaders pushing innovation forward like Dennis Morrow, Susan Comfort and Karina Mangu-Ward
• Social entrepreneur startups like Erine Gray and Ted Howard
• Sector activists like Robert Egger and Jeff Raderstrong

And many, many more.

It’s been amazing to hear from these leaders about where we’re going in the world of social change and where they hope to take us. You can see all of the past interviews here.

But now I’d like your ideas for who I should interview next. What all of these interviewees have in common is that they are people who are pushing boundaries, asking hard questions, creating new realities, making real social change. Who’s next?

So help me add to the list. If you have a suggestion for who I should interview next, leave a comment below or email me at info@socialvelocity.net. Thanks for your help!

Tags: Convergence, interviews, nonprofit, nonprofit leaders, Philanthropy, Social Entrepreneurship, social innovation

Picking Up Where Uncle Sam Leaves Off: An Interview with Erine Gray

In this month’s Social Velocity blog interview, we’re talking with Erine Gray. Erine is the founder of Aunt Bertha, an online Benefit Corporation that matches people in need with federal, state, county, city or nonprofit services to specifically address their situation. Erine studied economics at Indiana University, public policy at the University of Texas and spent the better part of eleven years consulting (six of which were spent helping governments operate more effectively).

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

Nell: Aunt Bertha essentially exists to fix an inefficient system of connecting services to those who need them. It seems to me your model is at the heart of an ongoing debate about whether there are some public goods that simply cannot be turned into marketable items. Obviously you believe there is a market for you, but why? What sorts of public goods can be turned into a market?

Erine: I’ve always been kind of a public policy nerd and understand that government has a vital role in the social safety net. Having graduated from the LBJ School of Public Affairs, I understand that government programs don’t have the luxury of catering to a certain segment. Programs like Food Stamps (now called SNAP) and Temporary Assistance to Needy Families (TANF) don’t get to choose who they serve because they *are* the safety net.

The private sector is different. A consulting firm can choose to only serve telecommunications companies with 200 – 500 employees. A shoe store can focus on high-end running shoes. These types of organizations can survive if they hustle and convince enough people to become customers.

When you start to look at the amount of money spent by both government social service programs and charities, the figure is spectacular. It just takes a little research and a few clicks in Excel to see the enormous amount of money that is spent every year either telling people about these programs or determining whether or not people qualify.

If we accept, for a moment, that the public social safety net should exist (and I believe it should), we then must ask the question: is the public doing a good job of administering these programs?

I’ve spent the last 10 years working in this industry, with six of those years working on projects with city and state governments. My answer to this question would be: there’s plenty of room for improvement.

We don’t need to start over because government does some things very well. But we should break down the problem and see what should be outsourced to qualified vendors.

Should governments build their own marketing teams to tell people about their programs? Or should governments work with professional marketing firms to get the word out as needed? Should charities build their own fundraising software or would Blackbaud [fundraising software] do the trick?

Nell: The fact that you are a for-profit company is fascinating to me. Can you explain how your business model works and how you make money in a space that has traditionally been dominated by the nonprofit and public sectors? And do you envision those public-run services (like 211) eventually going away?

Erine: Aunt Bertha picks up where Uncle Sam leaves off by making it easy to find and apply for social services online and through mobile devices. Our service is and always will be free for people in need or those working on their behalf. Our users include everybody from the homeless (yes, they definitely have internet access in many cases), working moms, family caretakers, social workers and case managers.

We list every government and charitable program we can find on our site for free as well.

Many charities and government agencies don’t yet offer a way for people to apply online. We offer a software platform that allows them to accept and process applications online. Charities pay us a monthly fee for this service. Our customers are housing programs, churches, government agencies, charter schools or any other organization that provides need-based services to people.

In your question you refer to the 211 service, I would hope that there will always be a place for these call centers. The 211 call centers are staffed with committed volunteers that help people navigate very difficult circumstances, 24-hours a day. However, if Aunt Bertha is successful, more people in need will be able to find social service programs themselves (without needing to call someone). We believe that if more people find help themselves, the cost of running a government funded call center will go down – which is better for everyone involved.

Nell: Any social entrepreneur just starting out struggles with the question of whether to organize as a for-profit or nonprofit. How and why did you make your decision?

Erine: I went back and forth about this one. Our mission is to make human service information accessible to people and programs. To truly be successful at this mission, I believe we need to be a sustainable business.

With our software, governments and charities are saving money over the way they currently work. They are willing to pay us a monthly fee to help them provide a better service to people in need. We think this is a better approach and more importantly, we never wanted to be in a position where we are competing with our customers for donations. That’s why we chose to be a certified Benefit Corporation (a business that meets higher standards of mission and accountability).

Nell: How widespread is Aunt Bertha? How many people are using the service now and what are your goals for the future?

Erine: Aunt Bertha is available in every zip code in the United States. Our service is both on the web and available on most smart phone browsers. Although our service works everywhere, our focus so far has been in Texas – where we have a critical mass of programs in most zip codes.

So far we’ve helped more than 20,000 people find help and we believe we’re just getting started. Right now we’re focused on making our service as intuitive and user-friendly as possible. We think we’re on to something big, but we don’t want to skip the important steps of listening to our early adopters.

Nell: You were part of the Austin Technology Incubator and an Unreasonable Institute fellow. Have you been able to attract investment capital and if so what about your model is attractive to them?

Erine: We were fortunate enough to have been accepted as an ATI company this year and it has provided us access to coaching, introductions and inexpensive office space. ATI is a joint initiative between the City of Austin, the State of Texas and the University of Texas and it feels like they’re all behind us. Whenever you can be in an environment where more and more people are rooting for you it’s always a good thing.

The Unreasonable Institute was a very memorable experience for us. I had a chance to live with 21 of the world’s most interesting social entrepreneurs and words can’t describe what I learned during that experience. I highly recommend people check out the site and try and figure out a way to get to know as many people associated with the Unreasonable Institute as possible. They’re making a big dent in the world.

We recently raised capital after bootstrapping the business for the first two years. We’re very excited about our future. Our investors so far have liked the audacity of our mission. We think we can organize the world’s social service information so people and programs can find what they need in seconds. And because we sell software-as-a-service in a huge industry, we’re an attractive investment with a scalable model.

Most importantly, we’re starting to see – in real-time – the supply of and demand for social services. That’s never been done before and we hope that this data will allow some amazing things to happen. It’s hard not to get behind this goal.

Tags: Aunt Bertha, benefit corporation, Erine Gray, government innovation, social innovation, social services

5 Nonprofit Trends to Watch in 2013

I started a tradition in December of 2010 with a blog post on the nonprofit trends to watch in the coming year. Keeping with that tradition, here is my take on the nonprofit trends for 2013 (you can read my nonprofit trends posts for 2011 and 2012 as well).

As I’ve said before, I’m more optimist than fortune teller, but I do think that the nonprofit sector is changing in some exciting ways. And I for one am excited to see what the new year brings. Here’s what I think we should watch for:

1. More Demand for Outcomes

The biggest trend I see is a growing demand for nonprofits to 1) articulate what results they hope their work with achieve and 2) track whether those results are actually happening. Nonprofits have long discussed the outputs of their work: # of people served, # of services provided. But the sector is increasingly being asked to articulate and track the outcomes they are achieving. How are people’s lives changing because of the work a nonprofit does? Social change has become an increasing demand of funders and other supporters. That means nonprofits must develop their own theory of change (how they use community resources to create change to a social problem) and then measure whether that theory is becoming a reality.

This increasing focus on nonprofit outcomes is leading to the 4 other trends:

2. Decreasing Emphasis on Nonprofit “Overhead”

The bane of the nonprofit sector is the meaningless and destructive public perception that you can separate nonprofit programs from the administrative costs (staff, technology, systems, materials, fundraising) to make those programs happen. This separation is so destructive because it forces nonprofits into a misalignment of money, mission and competence which sets them up for failure. A nonprofit cannot succeed if they don’t integrate their operations and money-making efforts into their mission. But the good news is that more and more people are coming to realize that you can’t just invest in programs without the staff, infrastructure and fundraising to make those programs happen.

3. More Advocacy for the Sector
 as a Whole
The nonprofit sector has long been a fractured grouping of organizations of various sizes, business models, and issue areas. It has been almost impossible to organize the disparate sector to fight for better government regulations, 
improved public perception, more funding. But that tide is starting to turn. With the advent of groups like CForward and a growing discussion about how best to advocate for the sector as a whole, I believe that we will start to see the sector organize, mobilize and build the confidence necessary to claim its rightful place.

4. Savvier Donors
Because nonprofits are getting more savvy, donors are as well. In addition to an increasing demand for proof of outcomes, donors are slowly starting to understand the difference between two kinds of money in the sector: revenue and capital. They are starting to recognize that nonprofits cannot exist on revenue alone. Nonprofits must have infusions of capital every once and awhile to strengthen and grow their staff, technology, systems, fundraising. Call me crazy, but I truly believe that donors are becoming more open to making capacity capital investments in the nonprofits they love. That’s because donors are realizing that in such a stark economic environment those nonprofits that don’t have adequate infrastructure simply will not survive, let alone be able to adequately address the social problem they were organized to solve.

5. Increased Efforts to Rate and Compare Nonprofits

As nonprofit outcomes are increasingly in demand, donors become savvier, and the “nonprofit overhead” distinction diminishes, we will increasingly evaluate nonprofits based on the results they achieve, not on how they spend their money. But that requires that a whole infrastructure for evaluating and rating nonprofits emerges, just as it has for the financial markets. This has already started with Markets for Good, GreatNonprofits, and the changes Charity Navigator has made to how they rate nonprofits. I think this market for nonprofit rating infrastructure will continue to grow and evolve as we get smarter about focusing resources on the most effective nonprofits.

These are exciting times for the nonprofit sector. It seems that for the first time in a long time everything is on the table. And its up to nonprofits to understand the trends and where they fit as the sector evolves.

Photo Credit: zigwamp

Tags: capacity capital, Fundraising, growth capital, nonprofit evaluation, nonprofit outcomes, nonprofit ratings, nonprofit sector in 2013, nonprofit trends to watch, Philanthropy

How to Create a Nonprofit Financing (Not Fundraising) Plan

In an earlier post I talked about the common mistakes many nonprofits make in their fundraising plans. The biggest mistake is that they create a fundraising plan, not a financing plan. If you are serious about raising enough money to accomplish your goals, you need to create an overall Financing Plan for your organization. To help you do just that, I’m delighted to offer a repeat of our popular “Creating a Financing Plan” webinar. This webinar sold out when I offered it earlier this year. And here’s what one of those participants had to say about it:

“I loved the reframing of financing for desired results instead of funding for operations…your message to wed money to the mission was a big AHA moment, and I am now figuring out how to bring this to life for staff and Board.”

A financing plan is different than a typical fundraising plan for many reasons. Here is how they differ:

• A fundraising plan asks “How much can we accomplish with the money we can raise?” but a financing plan asks “How much should we raise to accomplish our goals?”




• A fundraising plan sets goals only for private revenue streams (foundation grants, individual gifts), but a financing plan includes goals for ALL money flowing to the organization (government grants, earned income, etc).




• A fundraising plan is for one year, whereas a financing plan is a strategy for attracting money for multiple years into the future.




• A fundraising plan has little to do with a nonprofit’s strategic plan, but a financing plan is based on what the nonprofit needs in order to meet the goals of their strategic plan.




• A fundraising plan is created only by the fundraising staff with no input or knowledge from the rest of the organization, but a financing plan is created with the whole organization’s input (board and staff).




• A fundraising plan only includes activities that raise money for programs, but a financing plan includes strategies for raising infrastructure dollars as well.

The “Creating a Financing Plan” webinar will help nonprofit leaders understand the steps to creating a financing plan for their organization. Webinar participants will learn how to:

• Set goals for ALL revenue streams flowing to the organization
• Determine the infrastructure dollars they need to raise
• Tie their financing plan to their strategic plan
• Create tactical steps to make the plan a reality, with activities, deliverables, people responsible, timeline
• Divide tasks by staff and board members
• Develop ways to monitor and revise the plan going forward

And remember, all of our webinars are available as recordings right after the live webinar, so even if you can’t make the time of the live webinar, you can still register and have access to all of the content.

I hope to see you there!

Creating a Financing Plan Webinar
Recorded

The registration fee will get you:

• A link to a recording of the webinar, which you can watch as many times as you like
• The PowerPoint slides from the webinar
• The ability to ask additional follow-up questions after the webinar

Cost: $39.00
Download Now

Photo Credit: theurchiness

Tags: board fundraising, creating a fundraising plan, financing not fundraising, fundraising plan, fundraising strategy, nonprofit capacity, nonprofit financial strategy, nonprofit fundraising, nonprofit strategy, nonprofit webinars

The Power of a Theory of Change

Last week I spoke at the Women’s Collective Giving Network (WCGN) national conference about the power of a theory of change. The WCGN is an affiliation of women’s philanthropic groups across the country. The members pool their money and give grants to nonprofit organizations. It is critically important that they, along with every nonprofit organization, understand and embrace the power of a theory of change.

With increasing competition for social change dollars it is absolutely crucial that nonprofit organizations develop their own theory of change. A theory of change is basically an argument for why a nonprofit organization exists. It describes how an organization uses community resources (money, volunteers, clients) to perform a set of activities which result in changes to the clients’ lives (outcomes) and changes to broader communities, institutions, or systems (impact).

Essentially a theory of change describes how a nonprofit creates social change.

So a very basic theory of change for a literacy program would look like this:

It used to be enough for a nonprofit to talk about what they produced (or outputs), such as meals served in a soup kitchen, hours spent reading to a child, beds provided in a homeless shelter, but that just doesn’t cut it anymore. In a world where there are fewer and fewer dollars and more and more nonprofits fighting for those dollars, philanthropists, government funders and others are increasingly asking the question “To What End?” So what if you created outputs, did anything really change because of your work? Did the lives of those in your program change and did our community change?

That’s where a theory of change comes in. If you can articulate what change you hope your organization is creating, then with that fundamental building block in place you can:

• Chart a strategic direction
• Prove your results
• Secure more support for your organization

And ultimately achieve the holy grail of the nonprofit sector: sustainable community change.

A theory of change is the fundamental building block that makes all of this happen, like this:

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. And you certainly can’t get 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 the only way to truly create long-term social change is to start with a theory of change. Which is why I encourage every nonprofit organization to go through the exercise.

If you need help crafting your own theory of change, check out our Creating a Theory of Change step-by-step guide, or if you need customized help to chart a strategic direction, check out our Strategic Planning consulting services.

Photo Credit: Kristymp

Tags: Convergence, evaluation, nonprofit competition, nonprofit impact, nonprofit measurement, nonprofit outcomes, nonprofit strategic plan, nonprofit strategy, Philanthropy, social change, theory of change, Women's Collective Giving Network