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When The Searing Truth Comes Into Focus

It has been a really difficult couple of weeks. And I think for those of us in the social change sector — the sector that works for equity, justice, compassion, inclusion, civility — these days have been particularly challenging. The events in Charlottesville have made obvious that there is so much work to do, and in fact, battles that we thought we had made real progress on (against Nazi-ism, anti-semitism, rampant racism) are far from over.

But if there is any silver lining to the events of the past weeks, it is perhaps that America is beginning to reckon with its past. One thing that has brought me solace during this time is Mayor of New Orleans, Mitch Landrieu’s beautiful speech from last May where he described why he led an effort to remove several confederate monuments in New Orleans. (An effort, by the way, that came out of an interesting –and now expanding — philanthropic experiment in bringing community together to have open, honest conversations).

Landrieu gave a thoughtful and compelling argument for why we must take down these monuments. As he put it:

“These statues are not just stone and metal. They are not just innocent remembrances of a benign history. These monuments purposefully celebrate a fictional, sanitized Confederacy; ignoring the death, ignoring the enslavement, and the terror that it actually stood for. After the Civil War, these statues were a part of that terrorism as much as a burning cross on someone’s lawn; they were erected purposefully to send a strong message to all who walked in their shadows about who was still in charge in this city…

[A] friend asked me to consider these four monuments from the perspective of an African American mother or father trying to explain to their fifth grade daughter who Robert E. Lee is and why he stands atop of our beautiful city. Can you do it? Can you look into that young girl’s eyes and convince her that Robert E. Lee is there to encourage her? Do you think she will feel inspired and hopeful by that story? Do these monuments help her see a future with limitless potential? Have you ever thought that if her potential is limited, yours and mine are too? We all know the answer to these very simple questions. When you look into this child’s eyes is the moment when the searing truth comes into focus for us. This is the moment when we know what is right and what we must do. We can’t walk away from this truth.”

Particularly in these times when leaders are in such short supply, I find Mitch Landrieu’s leadership and eloquent arguments inspiring.

He sees in this challenging moment an opportunity for Americans to come together, recognize our past, and create together a more just, inclusive and equitable future, as he described:

“Now is the time to send a new message to the next generation of New Orleanians…A message about the future, about the next 300 years and beyond; let us not miss this opportunity New Orleans and let us help the rest of the country do the same. Because now is the time for choosing. Now is the time to actually make this the City we always should have been, had we gotten it right in the first place. We should stop for a moment and ask ourselves…if presented with the opportunity to build monuments that told our story or to curate these particular spaces … would these monuments be what we want the world to see? Is this really our story? We have not erased history; we are becoming part of the city’s history by righting the wrong image these monuments represent and crafting a better, more complete future for all our children and for future generations. And unlike when these Confederate monuments were first erected as symbols of white supremacy, we now have a chance to create not only new symbols, but to do it together, as one people. In our blessed land we all come to the table of democracy as equals. We have to reaffirm our commitment to a future where each citizen is guaranteed the uniquely American gifts of life, liberty and the pursuit of happiness. That is what really makes America great and today it is more important than ever to hold fast to these values and together say a self-evident truth that out of many we are one. That is why today we reclaim these spaces for the United States of America. Because we are one nation, not two; indivisible with liberty and justice for all, not some. We all are part of one nation, all pledging allegiance to one flag, the flag of the United States of America. And New Orleanians are in, all of the way. It is in this union and in this truth that real patriotism is rooted and flourishes.”

As any good leader does, Mitch Landrieu helps us rise above division, turmoil, and adversity and see a new, better path. Perhaps what we are experiencing in America right now — the vitriol, the divisiveness — is an opportunity for us to confront our past and more consciously and inclusively create our future.

Photo Credit: Workers securing straps to the Robert E Lee statue at Lee Circle prior to it being removed from atop the column, May 19, 2017, Infrogmation of New Orleans.

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3 Questions To Regularly Ask Your Development Director

Beyond the mistakes nonprofit leaders often make in staffing their fundraising function, the relationship itself between a nonprofit executive director and the development director (or whatever you call the staff person in charge of bringing money in the door) can often be fraught.

In an ideal world, the executive director and development director have a symbiotic relationship: the development director creates the overall annual financial strategy and regularly updates the executive director on where the organization is on achieving that plan, while the executive director works with higher level money prospects and marshals the board to achieve their fundraising responsibilities.

But we don’t always live in an ideal world. And sometimes, as was the case in a recent coaching session I had with a client, an executive director is in the dark about how the organization is progressing on their money raising efforts.

If that is the case in your nonprofit, here are some key questions to ask your head money raiser:

  1. How does the money we’ve brought in to date compare along each revenue line goal? 
    When you create an annual financing plan for your nonprofit (and if you don’t, get on it), you know how much of each type of revenue (individuals, foundations, corporations, government, and/or earned income) you want to come in this year. Then, at any point during the year (and at the very least monthly) you should be asking your chief money raiser, what the organization has actually raised to date for each of those categories. For example, if you are 25% through your fiscal year, but you’ve only raised 5% of your individual revenue goal for the year, that may be a red flag. At the very least it’s cause for conversation with your development director. Perhaps it’s a timing issue (you have a big fundraising campaign closer to the end of the year), and that’s fine. But as the nonprofit leader, you should be able to ask (and get a clear answer to) where the organization’s revenue raising efforts are at any point in time.

  2. How do the numbers and types of gifts we projected compare to what’s actually happening? 
    It’s not enough for a money raiser to have an overall revenue goal for each type of revenue, he also needs to break each of those revenue types down into the number and level of contributed gifts (from individuals), grants (from foundations), or contracts (from government), etc. that will contribute to each revenue line’s overall goal. For example, if your nonprofit has a $250,000 individual donor revenue goal, your development director needs to break that down into the various levels of donors that will make up that $250,000 over the course of the year. You may have both major (one-to-one relationships) and smaller (many-to-one relationships) individual donors. He should project how many donors at each level he will need to hit each part of the individual donor goal. Then he can report to you (again, on at least a monthly basis) how that is progressing. A simple example of such a report (he would fill in the pink areas prior to each update) might look like this:
    And he should create a similar report for the other revenue lines (corporations, government, foundations, etc.) that your nonprofit pursues. The actuals will never completely match what you projected, but this exercise gives you a way to uncover and deal with surprises as they come.

  3. What keeps you up at night?
    Finally, the raw data is not enough. You also want to understand where your development director sees real problems. When you regularly ask this question she may reveal that the board  is not opening enough doors, or her database is inadequate, or the website is not where it needs to be, or her grantwriter needs more help. Then you can strategize together how to overcome those hurdles.

A regular, honest, and data-driven conversation between executive director and development director is the best route to fewer money surprises. And without it, a nonprofit has little hope of achieving financial sustainability .

Photo Credit: Images

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When Nonprofit Collaboration Actually Makes Sense

Let’s talk about nonprofit collaboration for a second. Funders and thought leaders often extol the virtues of collaboration among nonprofit organizations as a way to maximize increasingly limited resources. But pushing nonprofits to blindly collaborate, just for the sake of saving some money (“Can’t you all just work together?”), is really doing no one any favors.

Peter Panepento’s recent article in the Stanford Social Innovation Review, is among the latest of these calls for more collaboration. In fact he explains a sort of magic he sees in collaborations that are forged between quite disparate groups. He argues:

“At a time when nonprofits are getting squeezed by government budget cuts and facing increased need among those they serve, many groups are realizing that they cannot achieve their missions without building new alliances…Interestingly, many of the most successful collaborations have been between groups working on very different missions, or between nonprofits and groups outside the nonprofit field.”

Indeed, innovative collaborations can be very exciting. But we must make sure that when collaboration happens, it follows a thoughtful, strategic approach, otherwise it can come at quite a cost. We can’t just encourage nonprofit leaders to “collaborate more” and call it a day. There are very specific times when, and very specific ways to approach, collaborations that make sense.

First, it’s important to make a distinction between two very different types of collaboration:

  1. Little “c” collaboration where a nonprofit coordinates with other organizations to deliver programs and services and/or share best practices, vs.
  2. Big “C” Collaboration where nonprofit leadership analyzes their external marketplace and forges organization-wide, strategic alliances with other entities that can help move the nonprofit’s social change goals forward.

In their article “The Networked Nonprofit,” Jane Wei-Skillern & Sonia Marciano articulated this difference:

“Many traditional nonprofits form short-term partnerships with superficially similar organizations to execute a single program, exchange a few resources, or attract funding. In contrast, networked nonprofits forge long-term partnerships with trusted peers to tackle their missions on multiple fronts.”

Collaboration with a Big C is a strategic way for nonprofits to operate, but it necessitates that nonprofit leaders have a clear understanding of their individual nonprofit’s core competencies, target audiences, and desired social change outcomes (through a Marketplace Map and Theory of Change), so that they can be very clear about which entities they should Collaborate with in order to move those outcomes forward. And instead of viewing their nonprofit as a single organization, nonprofit leaders can begin to think of their nonprofit’s work as part of a larger network of social change.

So to Collaborate effectively, nonprofit leadership must embark on a 3-part process:

  1. Get clear about the nonprofit’s core competencies (what you do better than anyone else), target populations (who you seek to benefit or influence), and desired social change outcomes (the change you’d like to see in the world). This can be done by creating a Theory of Change.
  2. Map your external marketplace to determine the potential Collaborators out there and where and when it might make sense to forge strategic alliances.
  3. Finally, because these need to be organization-wide alliances, you must engage your board, not just your staff, in creating high-level relationships with those with whom you’d like to Collaborate.

In other words, in order to move your mission forward through Collaboration, you must better understand both your nonprofit and your external environment. By figuring out exactly what your nonprofit brings to the table that is different from and additive to what potential Collaborators bring to the table, you can more successfully develop partnerships with more high-level decision-makers in the nonprofit, government, and/or private industries that affect the social change you seek. And isn’t that what it is ultimately all about?

I’m all for Collaboration — when it makes strategic sense. But the only way Collaboration works is when a nonprofit gets very clear about what change they want and which entities out there can help achieve it.

Photo Credit: Joseph Stalin, Franklin D. Roosevelt, and Winston Churchill on the portico of the Russian Embassy during the Tehran Conference to discuss the European Theatre in 1943, Wikimedia.

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10 Great Social Innovation Reads: May 2017

May was another fascinating month in the world of social change. There are some interesting shifts happening among the institutions and movements working to improve black lives, new polls point to a surging American liberalism (not conservatism), the suburbs are no longer the route to the American dream, anti-hunger efforts may actually be perpetuating the problem, and a librarian who questioned the impact of Little Free Libraries received quite a backlash.

Below are my picks of the 10 best social change reads in May. But feel free to add to the list in the comments. And you can see a longer list by following me on Twitter @nedgington.

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

  1. The first 100 days of Trump’s presidency have been exhausting for the country. The Chronicle of Philanthropy offered some questions for philanthropist to think about after those first 100 days. And Trump’s budget recommendations, if adopted by Congress, could have pretty damaging effects on the nonprofit sector and the foundations that fund them.

  2. A more specific impact \ that the Trump Administration could have on the nonprofit sector would be to eliminate the Johnson Amendment. The 60 year old Amendment has prohibited churches and nonprofit organizations from any political campaigning. Robert Egger, founder and president of L.A. Kitchen and Vikki Spruill, president and CEO of the Council on Foundations, debated whether the repeal of the amendment would be a good or bad thing for the sector.

  3. Despite the fact that state and federal government is being led largely by Republicans right now, it looks like American populism may have a liberal, as opposed to conservative, bent according to some new polls. Ruy Teixeira from Vox analyzed recent poll data and argued that America is actually witnessing a liberal surge:  “Trump in the White House and the Republicans in control of Congress and most states…owes much more to the peculiar nature of the Electoral College, gerrymandering, structural GOP advantages in Congress, and poor Democratic strategy than to the actual views of the American public.”

  4. And that populism that is sweeping the country is beginning to target philanthropy. David Callahan argued that the underlying elitism of philanthropy must be laid bare: “America is in the midst of an epic backlash against elites, one that’s put a reality TV maestro in the White House. So far, philanthropy has been insulated from this broader convulsion, but there are good reasons for the sector to engage in its own introspection about elite power…There’s not yet much discussion about the bigger question regarding how much sway private philanthropy—and a growing class of savvy “super-citizens”—should have over public life in a democratic society like ours.” And Kristin A. Goss and Jeffrey M. Berry argued on the HistPhil blog that the populist surge is posing at least 3 challenges to foundations.

  5. There is something interesting happening in the efforts to improve the lives of African Americans. The NAACP fired its president Cornell William Brooks after only 3-years in the hopes that the organization could become more responsive to changing external circumstances. But Cyndi Suarez wondered whether this 100+ year old institution can adapt to and engage with growing social movements like Black Lives Matter.  And earlier in the month she described how BLM itself is evolving amid changing times.

  6. Jay A. Winsten from the Harvard Chan School of Public Health described how a national media strategy, even in today’s very fractured media environment, can move social change forward.

  7. Some new data in May showed giving differences between genders and generations, and the  Master of Public Administration program at the University of San Francisco created a nice infographic on The Current and Future State of Philanthropy.

  8. Something really interesting happened when a Toronto librarian questioned the claim that Little Free Libraries, the small birdhouse-like boxes of free books cropping up in neighborhoods around the country, are actually increasing literacy. People got really mad.

  9. Writing in CityLab, Richard Florida painted a pretty bleak picture of how the suburbs, once the destination for the growing middle class, are now crumbling: “Suburban growth has fallen out of sync with the demands of the urbanized knowledge economy. Too much of our precious national productive capacity and wealth is being squandered on building and maintaining suburban homes with three-car garages, and on the infrastructure that supports them, rather than being invested in the knowledge, technology, and density that are required for sustainable growth. The suburbs aren’t going away, but they are no longer the apotheosis of the American Dream and the engine of economic growth.”

  10. Finally, there’s a new book to add to your reading list: Andy Fisher’s Big Hunger: The Unholy Alliance between Corporate America and Anti-Hunger Groups. Fisher argues that anti-hunger nonprofits are perpetuating the underlying wealth inequality that causes hunger by aligning with corporations that are exacerbating poverty through low wages and job cuts.

Photo Credit: kyle rw

 

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3 Mistakes Nonprofits Make in Fundraising Staff

Before a nonprofit can achieve financial sustainability, the nonprofit leader has to figure out how to staff their money raising function effectively. When I conduct a Financial Model Assessment for a client, one of the sections of my final report is always focused on the nonprofit’s staffing structure and how that contributes to or detracts from the nonprofit’s ability to attract money. More often than not, a nonprofit that is struggling to bring enough money in the door is not thinking effectively about how they staff the money function.

And it typically boils down to three particular mistakes that a nonprofit’s leadership is making. These are:

1. There Is No Financing Strategy
You can’t expect to effectively staff your money raising function if you are not thinking about money in a strategic and holistic way. The very first step in structuring an effective money-raising staff is for a nonprofit’s leadership to figure out their organization’s financial model — how money should flow into and out of the organization. First you must assess what money-raising strategies fit best with your mission and core competencies. And then you need to develop a long-term financing strategy that is directly tied to the goals of your strategic plan. You can’t expect to hire people who will magically make money appear. Effective fundraisers must be driven by a smart money plan.

2. No Single Person Is In Charge of Money
Once you figure out your long-term financing strategy, you need to find (or promote from within) a person to oversee the entire money function of the organization. To truly use money as a tool, you can’t hire someone who can just write foundation grants, or someone who can just work with individual donors, or someone who can just secure government contracts. You need a single person who is thinking 100% of the time about all the ways money flows to your nonprofit. And make sure you offer enough salary to attract and retain a rockstar. It amazes me how many nonprofits expect to entice a great fundraiser by offering a salary that is comparable to someone with only a few years of experience. If you don’t have the current budget to pay a market rate, raise capacity capital to fund the first 1-2 years of the position. Once you have a great money raiser up and running, he will not only raise his own salary, but also grow your nonprofit’s overall financial engine.

3. Money Doesn’t Pervade Everyone and Everything
Finally, once you have a financing strategy and the right person to lead that strategy, then you need get everyone in the organization bought into and contributing (even in a small way) to its success — this is sometimes called creating a “culture of philanthropy.” But I would instead call it creating a “culture of mission financing,” which means every single person in the organization embraces the fact that in order to succeed in your mission, you must effectively finance that mission.  Money troubles often happen when nonprofit leadership offloads all money-raising responsibility to the Development Director. You must make sure that everyone in the organization (board and staff) understand their role in bringing money in the door. Create a culture where a staff member who doesn’t have dollar goals in her job description understands that giving donor tours, providing program outcome data, or writing thank you notes are critical to keeping the organization going. And make sure your board is trained in fundraising, has countless ideas for how each of them can contribute to the financial engine, meets a give/get requirement, and achieves specific individual and full board money goals.

How you staff your nonprofit’s money-raising function is directly tied to how much money you will bring in the door. Therefore you must create a smart financing strategy, hire a staff leader to execute on that strategy, and create a culture of mission financing that ensures everyone plays a role in the financial engine.

If you need help figuring out what’s holding your nonprofit back from financial sustainability, check out the Financial Model Assessment I provide my clients.

Photo Credit: Tax Credits

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Understanding The Full Costs of Nonprofits: An Interview with Michael Etzel

In this month’s Social Velocity interview, I’m talking with Michael Etzel. Michael is a partner in The Bridgespan Group, a global nonprofit organization that consults to nonprofits and philanthropists, provides leadership development support, and develops and shares insights — all with the goal of scaling social impact.

Since joining Bridgespan in 2006, Michael has focused on effectiveness across the full spectrum of social innovation financing, advising corporate, institutional, and family philanthropists and investors. Much of Michael’s work explores what it takes to use tools of innovative finance and impact investing to solve pressing social problems. His work and research in philanthropy also focuses on the question of what it takes to deliver results as a new approach to ending the nonprofit starvation cycle.

You can read other interviews in the Social Velocity interview series here.

Nell: In your research and writing you have focused a lot on what you call “Pay-What-It-Takes-Philanthropy,” the radical idea that different nonprofit solutions have different business models and thus require different costs and investments. This concept is so accepted in the for-profit world that it is a truism, but why is it a radical idea for nonprofit and philanthropic leaders?

Michael: It’s worth pausing for a moment to reflect on why business models and capabilities matter. Every nonprofit operates with an underlying business model and set of capabilities critical for program delivery. Failure to understand an organization’s business model frequently leads to underinvestment in core capabilities, and, as one program officer put it, “a hollowing out of civil society institutions.” We can’t have resilient, durable civil society organizations that deliver successful programs unless they operate from a position of financial strength.

As you highlight, segmentation and analysis of comparable performance data is common practice in the for-profit world. Leaders like Clara Miller, president of The Heron Foundation and former CEO of the Nonprofit Finance Fund, have long called for this kind of thinking in the social sector. But this type of comparison requires transparent and consistent data, something hard to come by. As one nonprofit executive reminded me, “If you think you can analyze a nonprofit through IRS 990 filings, you are in outer space.”

Yet, I wouldn’t say this a radical idea. Organizations like DataArts and CoMetrics show how this is possible. For example, DataArts gathers a variety of comparable revenue, cost, and performance data for arts and cultural organizations, and provides tools for reviewing that data. This provides grantees and grant makers with actionable data to inform management or funding decisions with an eye to effectiveness and efficiency. CoMetrics addresses a more diverse set of enterprises, providing software platforms and tools that enable those enterprises to collect, display, and compare financial, operational, and impact data against their peers. This bottom-up approach gathers data across organizations running the same type of business in the same field to form groups relevant for comparative assessment and learning.

Bridgespan’s preliminary analysis to date has shown that different types of nonprofit organizations have different cost structures based on their business model. Segmenting nonprofits by business model can help us compare similar organizations. When it comes to indirect costs, for example, nonprofit research labs have a median indirect cost rate of 63%, nearly two and a half times the 25% median rate of direct service organizations.

We plan to push ahead this year to refine and deepen our understanding of segmentation and how it applies to nonprofit cost structures and capital needs. Having this information will benefit funders and grantees alike when it comes to funding discussions.

Nell: You work with both nonprofit and philanthropic leaders, so you likely see both sides of this dysfunction. What do you think it will take to move the field to a place where those with potential solutions to social problems have enough and the right kinds of money to see their solutions come to fruition?

Michael: Nonprofits exist in a complicated marketplace, seeking capital from a broad range of funders. As in any marketplace, some influential market makers set the rules. The practice of setting limits on indirect costs in project grants to nonprofits/NGOs has its antecedents in the US government’s approach to funding R&D at universities during the post-World War II era. The federal government has changed practice dramatically since 1958, embracing the “fair share” approach—that federal agencies pay their fair share of true costs, including indirect costs.

Among private foundations, indirect cost rate policies have been common for decades. A RAND report from the 1980s captured the variety of policies at that time: “many foundations customarily pay full indirect cost as budgeted in a proposal. Other foundations may pay only a portion of… or specify a cap on the support of indirect costs.” More recently, our research has shown that many large foundations set a cap of 15% or lower on indirect costs. Yet, among the 20 large nonprofits we sampled, indirect costs comprised between 21% and 89% of total costs, with the median at 40%.

I offer this history because I see the indirect cost conversation changing. For decades, much of this conversation has been driven by nonprofit and NGO leaders’ concerns about caps on indirect cost reimbursement. But funders have begun to engage more deeply in this conversation over the last several years. In 2013, Forefront (formerly Donors Forum) convened a cross section of staff from smaller Midwest foundations to discuss barriers and potential solutions to funding indirect costs. In 2015, the three California Regional Associations of Grantmakers launched the Real Cost Project (now the Full Cost Project) with the dual goals of increasing the number of funders providing real-cost funding and building the skills and capacity of grantmakers.

Having philanthropic leaders at the table is important to overcoming the reality of power dynamics. In the same breath, it’s also important to see this issue for what it is—a complex systems issue. Acknowledging this complexity helps approach this issue from a place of empathy for funders that want to do the right thing, and nonprofits that want to own and manage the costs of delivering impact.

Funders have the opportunity to ask grantees their true costs of programs and to be prepared to pay their fair share of the operational and financial support it takes to deliver those programs. Meanwhile nonprofits can focus on knowing their costs and advocating for them. Funders cannot pay their fair share if grantees don’t tell them what it is!

Nell: Beyond researching and consulting on these topics, you also serve on the board of two nonprofit organizations. What has been your on-the-ground experience as a board member trying to put these concepts to practice?

Michael: Creating space for a conversation among peer board members has been important in establishing a shared understanding of the issues—and why sometimes the executive director very rightly chooses to say “no” to a grant that doesn’t cover true costs.

The reality of this “complex marketplace” also hits home—there is no one-size-fits-all solution. That puts a big burden on the executive director and finance team to effectively report and manage costs.

Photo Credit: The Bridgespan Group

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10 Great Social Innovation Reads: March 2017

March offered lots of insight about how philanthropy should respond in the age of Trump. From investing in social movements, to getting involved in advocacy, to strengthening local communities, to giving more than the required 5%, there was much advice. Add to that a growing interest in how to combat “fake news,” steps to creating a digital marketing strategy, and the idea of employing migration as a tactic to combat poverty, March had much to read.

Below is my pick of the 10 best reads in world of social change in March, but feel free to add to the list in the comments. If you want a longer list, follow me on Twitter @nedgington.

And you can see past months’ 10 Great Reads lists here.

  1. Heinz Endowments President Grant Oliphant takes issue with the current administration’s distaste for the media and the arts (as evidenced by Trump’s elimination of the National Endowment for the Arts in his proposed budget). Oliphant argues that journalists and artists play a crucial role in a thriving society: “The right of artists and journalists to tweak the nose of power, to challenge what we believe, to criticize those in high places, to hold accountable people who otherwise might anoint themselves kings, cannot be abridged because we find it at times uncomfortable. It is that very discomfort that tells us they are doing their part in maintaining a healthy society.”

  2. Vocalizing dissent as Oliphant does is only one path available to philanthropy in these challenging times. Many people had other ideas for how philanthropy should respond, including funding social movementsgetting involved in advocacycountering the increase in hate crimes, strengthening local communities, and giving more than the typical 5% of assets. As Grantmakers for Effective Organizations President Kathleen Enright puts it: “We have a choice to make. We can succumb to the swirling and diverting streams of information that wash over us with every passing week. Or we can use this moment as a call to action, first to crystalize our values and determine what matters most to our institutions. And then to act in support of those values in new, bold and creative ways.”

  3. Philanthropic visionary Clara Miller, president of the Heron Foundation, describes what the foundation will do now that they’ve reached their goal of putting 100% of their assets toward mission. As she writes, “It’s becoming increasingly important to think and act holistically with money and influence within and beyond our sector, seeking impact on both Wall Street and Main Street.”

  4. The revelations that Russia used fake news to influence the U.S. presidential election added urgency to attempts to find solutions to the growing misinformation ecosystem. Pew Research offered a comprehensive report about the future of fake news. And writing in Nieman Reports Joshua Benton compares American distrust of journalism with American distrust of banks. And Marina Gorbis compares our current reality to the creation of the printing press in the mid-1400s, which ushered in political, religious and scientific revolutions.

  5. Speaking of what we can learn from history about today’s challenges, Harvard professor Tomiko Brown-Nagin provides 7 lessons from history for today’s social protests.

  6. Never one to shy away from controversy, Phil Buchanan takes to task those who argue that social problems can be solved by nonprofit and for-profit solutions equally well. As he puts it, “The fact is that in many, dare I say most, of the issue areas in which nonprofits are working to make a difference, there isn’t a way to do it that jibes very well with making a profit. And indeed, that is why the nonprofits were formed in the first place — because markets weren’t taking care of the issue!” Amen!

  7. Writing in his Nonprofit Chronicles blog, Marc Gunther argues that few anti-poverty interventions include the effective approach of encouraging the poor to migrate to areas with better opportunities.

  8. Large and aging nonprofit organization Greenpeace underwent a complete shift toward 21st century fundraising and advocacy efforts using technology.  This fascinating case study describes how they did it.

  9. David Mundy from GuideStar kicked off the first of a great multi-part series on how nonprofits can create their digital marketing strategy.

  10. And Nonprofit Tech for Good offered 24 Must-Read Fundraising and Social Media Reports for Nonprofits.

Photo Credit: Beraldo Leal 

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Nonprofit Capacity Building Works: An Interview with Kathy Reich

In this month’s Social Velocity interview, I’m talking with Kathy Reich. Kathy leads the Ford Foundation’s BUILD initiative both in the United States and in 10 global regions. BUILD is an essential part of the foundation’s strategy to reduce inequality, a strategy arising from the conviction that healthy civil society organizations are essential to driving and sustaining just, inclusive societies. To that end, Kathy guides Ford’s efforts to implement sector-leading approaches to supporting the vitality and effectiveness of institutions and networks that serve as pillars of broader social movements.

Before joining Ford in 2016, Kathy was director of organizational effectiveness and philanthropy at the David and Lucile Packard Foundation, where she led a cross-cutting program to help grantees around the world strengthen their strategy, leadership and impact.

Kathy has long been a friend of the Social Velocity blog. You can read my interview with Kathy when she was at the Packard Foundation here and a guest blog post she wrote for the blog here.

You can also read interviews with other social changemakers here.

Nell:  You recently moved from the Packard Foundation to the Ford Foundation in order to launch their BUILD initiative, which is all about strengthening organizations. What are your goals with this new initiative and what successes have you seen so far? And what are you finding in terms of the areas where nonprofits need most help?

Kathy: The Ford Foundation has two big goals in mind for BUILD. First, we want to foster a measurably stronger, more powerful set of civil society organizations and networks working to address inequality around the world. Second, we aim to build understanding within the Ford Foundation, and ultimately throughout the field of philanthropy, about how strengthening key institutions can advance social justice.

The foundation has committed $1 billion over five years to BUILD because we believe that the fight against inequality needs resilient, durable, and fortified civil society institutions. Individuals and ideas also are critical, but the key role of institutions as drivers of sustained social change is a core, and sometimes overlooked, aspect of social justice work.

Each of the BUILD grantee organizations and networks will receive five years of support, at levels higher than what they have historically received from the Ford Foundation. Much of this support will be as flexible as we can legally make it; most grants will include generous general support. The remainder of each BUILD grant will provide support for nonprofit organizations and networks to strengthen their strategies, leadership, management, and finances. Each BUILD grantee will develop and then implement its own institutional strengthening plan. Although Ford Foundation staff will consult on drafts of these plans, the grantee will be “in the driver’s seat” in determining their institutional strengthening priorities and how best to address them.

So far we’ve made about 90 BUILD grants, and honestly it’s a bit early to say how well they are working. We do know where organizations are planning to spend the money. The vast majority of BUILD grantees, 79 percent, are choosing to strengthen their core operations, investing in areas such as financial management, fundraising, communications, evaluation, and HR. About two-thirds also are investing in strengthening capacities critical to social justice work, such as legal, research, network building, and advocacy. Close to half are investing in strengthening their strategic clarity and coherence, 36 percent are investing in leadership development and governance, and 32 percent are choosing to deepen their organizational commitments to diversity, equity, and inclusion.

It’s important to note that BUILD is not the Ford Foundation’s only investment in strengthening nonprofit institutions. BUILD is part of FordForward, the Ford Foundation’s multi-pronged effort to make philanthropy part of the solution to inequality in a deep and lasting sense. In addition to BUILD, two other aspects of FordForward focus on strengthening nonprofits. The foundation is giving more general support grants across all program areas, with a goal of making general support our default type of grant whenever possible. We also are increasing overhead rates on project grants to a minimum of 20 percent, to more adequately address the indirect costs of executing projects and programs.

Nell: This is a pretty innovative approach to capacity building, how do you plan to share what you learn with other funders and with the sector overall?

Kathy: We’re planning a robust evaluation and learning strategy, although we’re really just getting started. Our hope is to share some early findings by year’s end. We’ll be focusing on three sets of key questions throughout the five-year initiative:

  • Do BUILD grants work? Do the organizations and networks that receive this funding become stronger and more durable over time? And if so, what if any impact does that have on the organization’s effectiveness?
  • If the BUILD approach works, what about it works? Is it the general operating support, or a specific kind of organizational strengthening, or something else?
  • Have we changed the way we do business at Ford, moving away from one-year project grants in favor of larger, more flexible grants?

Along with our evaluation and learning plan, we’re also developing a communications strategy to share what we learn with the field and engage in dialogue with others. We’ll be publishing evaluation results, speaking at conferences, and making active use of social media.

Nell: Both the Ford Foundation and the Packard Foundation are rare funders in that they are very committed to creating strong nonprofit organizations through heavy investment in capacity building. Do you think philanthropic and government funders are starting to follow your lead? Or what will it take to make that happen?

Kathy: Well, we certainly hope they are! It’s important to acknowledge that capacity building grantmaking is not new; in launching BUILD, we’ve learned from and appreciate the work of leaders in this field like the David and Lucile Packard Foundation, as well as the William and Flora Hewlett Foundation and the Evelyn and Walter Haas Jr. Foundation.

Over time, we hope that the ranks of capacity building funders will grow. We hope that BUILD will influence other donors by contributing to the evidence base that nonprofit capacity building works—that stronger, more durable, and more resilient organizations and networks are more effective at achieving their missions.

We also hope to contribute to the evidence base about what kinds of capacity building work best for organizations and networks of different types and sizes, working on different issues in diverse geographies. That’s a tall order, but one of the great things about being a global funder and being able to invest significant resources in BUILD is that we’re able to try this grantmaking approach with a broad range of institutions.

Nell: The Ford Foundation made a very public move two years ago to focus their efforts on fighting inequality. But that goal has arguably become harder given the political winds. How does a foundation like Ford navigate achievement of their desired impact in a potentially more difficult external environment?

Kathy: The Ford Foundation has worked in the U.S. and around the world for more than 70 years, and we’ve seen a lot of upheaval during that time. We’re acutely aware of the challenges facing our work, but we’re moving ahead with optimism and with what my boss Darren Walker calls “radical hope.”

BUILD is a big part of that hope. I believe strongly that in uncertain times, a BUILD approach to grantmaking is one of the smartest choices a foundation can make. By giving our grantees multi-year general operating support, we are giving them the resources and the flexibility to pivot their work quickly in the face of new realities. By also giving them thoughtful and flexible institutional strengthening support, we are enabling them to invest in their own leadership, strategy, management and operations at a time when they have to be at the top of their games.

Photo Credit: Ford Foundation

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