When I work with nonprofit leaders to create a strategic plan, one of the first things we do together is create a Theory of Change. A Theory of Change is an articulation of why your nonprofit exists — what you ultimately hope to accomplish. The Theory of Change is the culmination of answers to a set of 5 key questions, the first of which is, “Who is Your Target Population?”
Your Target Population is the individuals or groups that your nonprofit is seeking to benefit or influence. So if you are a social services nonprofit, your target population is probably your clients. If you are an advocacy group, your target population is probably lawmakers. But often a nonprofit has multiple target populations. For example, a school that works directly with both children and their parents would have both groups as separate target populations.
When a nonprofit exists just to do good work, its leaders are less clear and less disciplined about exactly who they are seeking to benefit or influence. But it is absolutely essential that your nonprofit get crystal clear about who your target population is, in order to better create change for those targets, more effectively encourage funders to invest in what you are doing, put your limited resources to their highest and best use, and, most importantly, to really understand how best to create change with your target.
But figuring out your target population is not easy.
First, let’s start with who is not your target population:
Not Your Funders
Your target population is not individuals or groups who fund your work. While funders are absolutely critical to your success, they are not core to your mission-related work. So while you would love to influence them to give you more money, their doing that will not by itself create social change. They are not your target population, rather they are a means to an end.
Not The Targets of Your Competitors or Collaborators
Your target population is also not individuals or groups that are being better benefitted or influenced by other organizations or entities. This is where your Marketplace Map comes in (another key part of a strategic planning process). As a nonprofit you will be most successful when your 1) core competencies (what you do better than anyone else) uniquely position you to address 2) a community need, apart from your 3) competitors or collaborators. So once you figure out who your competitors and collaborators are, you should avoid target populations that are being more effectively served by those other entities.
Not Those Who You Cannot Change
Your target population is also not individuals or groups who you really want to help, but are simply not well-positioned to do so. This is the case with nonprofit leaders who are so big-hearted that they continue to add new groups to serve until they realize that their services and the people they serve range much too far and wide. This approach often spreads a nonprofit too thin and ends up providing diminishing returns for the organization and their clients. While it often goes against a nonprofit leader’s ethos, sometimes you have to turn some people away in order to better serve those who you can serve really well.
So who is your target population?
Your target population then are those people who you are uniquely positioned to benefit or influence and in doing so you will move closer to achieving your nonprofit’s long-term vision for change. When you get clearer about who you are best positioned to benefit or influence, you will be better able to direct your precious resources (staff, board, funders, volunteers) toward achieving that ultimate goal.
In other words, when you are clearer about who you want to change, you will become better at actually creating that change.
If you want to learn more about a Theory of Change, download the Design a Theory of Change Guide, or if you want to learn more about the strategic planning process I take clients through, download the Strategic Planning Benefit Sheet.
Photo Credit: vizzzual.com
Last month I was asked by Ted Bilich, CEO of Risk Alternatives — a Washington, DC firm helping nonprofits manage their organizational and financial risks — to participate in a podcast. This is part of their ongoing podcast series “About Risk” which talks to thought leaders about risk management and process improvement for nonprofits, small businesses, and startups.
In the podcast Ted and I talk about:
- How the nonprofit landscape has become more competitive
- Why nonprofits need a theory of change
- How and when to engage in strategic planning
- How nonprofits can determine if they are applying best practices
- The benefits of a financial model assessment
- How to address common risks involving a board of directors
- And much more
You can listen to the podcast below, or click here.
Photo Credit: Patrick Breitenbach
March was a whirlwind in the world of social change. From successful nonprofit advocacy efforts, to new ways to measure fundraising effectiveness, to finding inspiration in small American cities, to a disconnect between civic engagement funders and activists, to new technology to serve the homeless, and a lot more in between, there was much to read.
Below are the top 10 things that caught my eye in the world of social change in March. If you want to see the longer list, follow me on Twitter @nedgington. And if you want to see past months’ 10 Great Reads go here.
- SeaChange Capital Partners put out a stunning report about the depressing state of financial risk management in health and human services nonprofits in New York, but their insights could really be applied sector-wide. As the report cautions: “Trustees must strive to maximize the good that their organization does while managing its risks. Balancing these can be challenging because of the passion they feel for the organization and its mission. Nonprofits lack the indicators of organizational health that reach the directors of for-profit businesses, such as stock prices or credit spreads…In this context, nonprofit trustees in leadership positions must ensure that well thought through risk management processes are in place. In a challenging operating environment, the status quo is no longer acceptable.”
- Perhaps help is on the way. A fascinating conversation happened between the head of the Nonprofit Finance Fund, Antony Bugg-Levine and Fred Ali, head of the Weingart Foundation and champion of the movement to cover full costs and give nonprofits unrestricted flexible funding. Ali is a huge proponent of investing in nonprofit capacity, as he describes: “The incessant [funder] focus on restricted programmatic grants has come at a huge cost to our sector. When we were considering a shift to unrestricted grants, we took a look back and found that many times the organizations we were supporting were not producing the outcomes we were looking for because they didn’t have the ability to invest in the kind of infrastructure that is necessary to produce those outcomes. So when I hear foundations object to our approach, I have to ask, ‘What are you trying to accomplish? Does your grantmaking approach help or hinder the development of capacity and sustainability?’ It is pretty clear that we have a lot of nonprofit organizations that are doing incredible work, being asked to do even more work, and they are not getting the kinds of support they need to that work effectively.” Yep.
- Pew Research is really knocking it out of the park lately. Every day they come out with fascinating data slices that are relevant and topical. Like their infographic on the 10 demographic trends that are shaping the U.S. and the world, which blew my mind. And if you want to dig into data just on the nonprofit sector, check out this in-depth report from The Bureau of Labor Statistics, which The Nonprofit Quarterly calls “required reading for leaders and board members of nonprofits and philanthropy.”
- On Monday, the governors of both California and New York signed legislation raising the minimum wage in their states to $15 per hour. Apparently we have the advocacy efforts of nonprofits to thank for this social change.
- But economics professor Mark Hendrickson doesn’t see a lot of value in the nonprofit sector. If you feel like getting justifiably incensed, take a look at his eye-popping read in Forbes where he is responding to what he calls the “turf war” between philanthropy and capitalism. Hendrickson provides many stunning quotes about the nonprofit sector, including this whopper: “Many non-profits do good work (albeit without the efficiencies imposed by the profit-loss calculus). However, they have no moral standing to criticize or condemn those who create the wealth that the non-profits spend. Non-profits essentially are professional mendicants trying to do good with other people’s money. It’s time for the non-profits to abandon their petty turf war and to muster enough grace at least to keep silent if they can’t bring themselves to express gratitude for the dominant, indispensable role of the profit-makers in advancing human welfare.” Wow.
- So now that you’re mad, let writer James Fallows inspire you. He and his wife Deb have been on a three-year journey across the country visiting small cities to understand what contributes to their cultural and economic resilience. What they found is that despite political dysfunction at the national level, there is some very inspiring progress happening at the local level: from urban renewal, to bipartisan compromise, to educational reform, to state-of-the-art job training and much more. As Phillip Zelikow, a professor at the University of Virginia and quoted in Fallows piece put it: “In scores of ways, Americans are figuring out how to take advantage of the opportunities of this era, often through bypassing or ignoring the dismal national conversation. There are a lot of more positive narratives out there—but they’re lonely, and disconnected. It would make a difference to join them together, as a chorus that has a melody.”
- And speaking of innovation, some nonprofits have developed apps to better serve the homeless, to varying degrees of success.
- Writing about civic engagement in The Nonprofit Quarterly Austin Belali bemoans the disconnect between those who are leading a new surge in civic movements (like Black Lives Matter) and the philanthropists funding civic engagement efforts, noting: “While the leaders of what could be described as a twenty-first-century movement for inclusive democracy are largely women and people of color, civic engagement philanthropy and the organizational leadership it supports is stubbornly the opposite.” And looking at a specific kind of civic engagement (voter turnout among young people), Abby Kiesa and Peter Levine might agree when they argue in the Stanford Social Innovation Review: “We must ask whether society supports youth engagement, and, if it does, how that support can be made equal for all youth, regardless of education, race, and income. We believe that encouraging youth to engage and to contribute their skills and values can help improve the political culture, but major institutions—educational, governmental, political, and civic—must actually want that to happen.”
- Adding to what has been a scarce (but hopefully growing) body of research on fundraising effectiveness, The Bridgespan Group released a new study about calculating the fundraising effectiveness of each affiliate within a national nonprofit network (like Big Brothers Big Sisters or the YMCA). They created a calculation they call “share of wallet,” which they define as “current fundraising performance compared to fundraising potential as gauged by the pool of donor dollars you draw from.” This fairly simple calculation of how much each site raises vs. what is possible to be raised can help a national nonprofit uncover which sites are more successful and why, and then hopefully help lower performing sites raise more.
- And finally, social media maven Beth Kanter urges us all to take a digital detox day. Sounds fantastic…how about a week instead?
Photo Credit: David McSpadden
I’ve been thinking about creativity a lot lately. I don’t mean getting messy with paints and crayons, although that’s cool too.
Rather, I’ve been thinking about the idea (which was new to me until the last few years) that each one of us was put on earth to create something unique and important. Creativity is not just the assignment of famous writers, talented artists, even genius entrepreneurs and inventors.
Creativity is inherent in each one of us as human beings. And it is our obligation to tap into that creativity to do what we were put here to do. As (my hero) Steven Pressfield, author of The War of Art, wrote:
“If you were meant to cure cancer or write a symphony or crack cold fusion and you don’t do it, you not only hurt yourself, even destroy yourself. You hurt your children. You hurt me. You hurt the planet. You shame the angels who watch over you and you spite the Almighty, who created you and only you with your unique gifts, for the sole purpose of nudging the human race one millimeter farther along its path back to God. Creative work is not a selfish act or a bid for attention on the part of the actor. It’s a gift to the world and every being in it. Don’t cheat us of your contribution. Give us what you’ve got.”
Have you ever watched someone do something and felt that they were so incredibly suited to what they were doing that you were witnessing the work of an angel?
I know this sounds crazy, but I saw this with my son’s basketball coach recently. With two active boys I’ve seen lots of coaches in my time (some better than others). But I had never witnessed such complete grace and flow. Normally he’s just an average guy, but when this coach enters the basketball court you instantly can tell that he was put on this earth to inspire children to give the sport their all. His beautiful mix of tough love, endless support, helpful critiques, and raw passion for the sport turned a rag-tag team of kids who had never played before into a sight to behold.
And it makes you think, what if for some reason this coach had never become a coach? What if he, or some other force, got in his way? What would this world be like if he wasn’t allowed to be a coach? What would his life be like if he had to stifle his obvious gift?
But we do, all of us, sometimes (or perhaps a lot of times) get in our own way. We hinder ourselves from figuring out what our unique contribution is. When that happens we need inspiration to spur us to find our creative voice.
As Elizabeth Gilbert, author of Big Magic, explains, that when you are stuck:
“Find something to do — anything, even a different sort of creative work altogether — just to take your mind off your anxiety and pressure. Once, when I was struggling with a book, I signed up for a drawing class, just to open up some other kind of creative channel within my mind. I can’t draw very well, but that didn’t matter…I was fiddling with my own dials, trying to reach inspiration in any way possible…Einstein called this tactic ‘combinatory play’ — the act of opening up one mental channel by dabbling in another. This is why he would often play the violin when he was having difficulty solving a mathematical puzzle; after a few hours of sonatas, he could usually find the answer he needed.”
When I’m lost and can’t get back into my creative flow, I turn to another form of creativity to inspire me, sometimes art, sometimes writing, sometimes dance or music.
Something that has inspired my creativity lately is Walter Martin’s video for his song Down by the Singing Sea. His ethereal song paired with images of Russian ballroom dancers utterly in their own flow is completely captivating. It’s goofy and awkward and beautiful and thrilling all at the same time. For me, this is witnessing grace. So I listen and watch (and, yes, dance!) and their creativity spurs my creativity.
Maybe Walter will work for you as he does for me. Or maybe he won’t.
But you must find your creativity. Because when you are creating what you were put here to create, you are “nudging the human race one millimeter farther along its path back to God.”
So don’t cheat us of your contribution. Give us what you’ve got.
Photo Credit: Barry Goyette
The new millennium has been a difficult one. A struggling global economy, threatening climate change, crumbling education and healthcare systems, and a widening income gap are just a few of the social problems we face. And as our social challenges mount, and the government increasingly offloads services, the burden shifts to the nonprofit sector.
Now more than ever nonprofit leaders must step up to the plate. In fact, it is time for a new kind of nonprofit leader, one who has the confidence, ability, foresight, energy, and strength of will to find and deliver on solutions. It is time we move from a nonprofit leader who is worn out, worn down, out of money and faced with insurmountable odds, to a reinvented nonprofit leader who confidently gathers and leads the army of people and resources necessary to create real, lasting social change.
In my mind, here is what the new nonprofit leader should look like:
Unlocks the Charity Shackles
“Charity” is more than a word, it’s a destructive mindset that keeps the work of social change sidelined and impoverished. “Charity” harkens back to the beginnings of philanthropy, which was largely the purview of women and viewed as tangential to and less valuable than the more important “business” of the male-dominated world. While charity was an afterthought, social change is rapidly becoming an integral part of the economy. As social problems mount, we must shift from the “charity” of our predecessors to an understanding of social change as part of everything we do. And nonprofit leaders must confidently and assertively articulate the critical importance of their work and why it requires real investment, because social change is about changing larger systems. So it takes real, significant investment of resources, not the pennies that charity requires.
Moves From Misplaced Gratitude to Impregnable Confidence
In the nonprofit sector there is such a pervasive power imbalance that misplaced gratitude, or gratitude for acts that are actually NOT helpful, often gets in the way of real work. If a nonprofit leader acts grateful when she should actually voice frustration or disappointment (with a delinquent board member or a meddlesome funder), she is cutting off authentic conversations that could result in more effective partnerships. Nonprofit leaders must rise from bended knee with confidence in themselves, their staff, and their social change work to articulate what they really need. To be truly successful, a nonprofit leader needs a board that will move mountains, donors who fully fund and believe in the organization, and a staff that can knock it out of the park. And they get there by being honest about, not grateful for, the roadblocks in the way.
Lives, Breathes and Leads Strategy
Real social change is only a pipe dream if it is not connected to smart strategy. To get there a nonprofit leader must ask board and staff to answer some key strategic questions like:
- What change do we want to create?
- Where do we fit in the external environment?
- How do we measure if that change is happening?
- What are the right activities to get to there?
- What is the most sustainable financial model to get there?
- What people and networks do we need with us?
These are not easy questions, and finding the right answers is even harder. But that is true leadership.
And part of that strategy may involve a (formerly feared) move into advocacy. 501(c) 3 organizations have long been told to stay out of politics. The myth is that charity is too noble to be mired in the mess of pushing for political change. But the fact is that simply providing services is no longer enough to solve the underlying problems. Nonprofits are increasingly recognizing that they can no longer sit by and watch their client load increase while disequilibrium grows. Nonprofits must (and many already are) advocate for changes to the ineffective systems that produce the need for their existence.
Uses Money as a Tool
Without money, a compelling, inspiring, world-changing vision for social change is only a sentence on paper. As much as we might like to deny it, nonprofits exist in a market economy, and without a smart plan for how a nonprofit will secure and use money there is no mission. So instead of dreaming up magic bullet fundraising schemes, a nonprofit leader must develop an overall financial model for her work that fully integrates with the organization’s mission and core competencies. And because money is so central to mission, you cannot make decisions about the organization, about programs, about staffing, really about anything without understanding the financial implications of those decisions.
Embraces the Network
If instead of building an institution, a nonprofit leader built networks, she could be much more effective at creating long-term social change. A true leader leaves her ego, and the ego of her organization aside in order to assemble all necessary resources (individuals, institutions, funding) to chart a path towards larger social change. Instead of thinking just about her organization, her staff, her mission, her board, her donors, the nonprofit leader must analyze and connect with the larger marketplace outside her walls, the points of leverage for attacking the problem on a much larger scale than a single organization can. A nonprofit leader understands that the network approach — particularly for nonprofits that are so resource-constrained — can create a much larger effect than a single entity can.
I believe that what separates great leaders from mediocre leaders is an ability to inspire others to greatness beyond what they thought possible. A true leader asks us to rise above our current circumstances – and in the nonprofit sector where more and more is being asked of organizations with less and less, those circumstances are often dire — to do more and be more than we ever thought possible. It is with that kind of real leadership that lasting social change can happen.
Photo Credit: Chuck Abbe
In today’s Social Velocity interview, I’m talking with Sean Thomas-Breitfeld, Co-Director of the Building Movement Project, which brings a social movement perspective to research on nonprofit organizations. Prior to joining the BMP staff, Sean spent a decade working in a variety of roles at the Center for Community Change, where he developed training programs for grassroots leaders, coordinated online and grassroots advocacy efforts, and lobbied on a range of issues. Before joining the Center, Sean worked as a Policy Analyst at the National Council of La Raza, where he developed research and lobbied on issues related to employment and income security.
Nell: What is the role of leadership in movement and network building? How do you balance the need for organic and distributed power with the need for someone (or multiple someones) to provide vision and marshal resources?
Sean: I think it’s important to start by teasing apart the concepts of movements and networks, or any other organizational structure/formation that might be the “cool new thing” in the nonprofit sector at any point in time.
I’m pretty traditional (admittedly even rigid) when it comes to what makes a movement. For me, movements are bigger than any organization, coalition, network or campaign could ever hope to direct or contain. That’s not to say that organizations – and networks of organizations – don’t have a role in supporting movements, but nowadays it seems like everyone’s talking about movements, but too often in a way that’s disconnected from the kind of fundamental social change that feminist, anti-war, civil rights movement leaders did a generation ago.
If an organization is trying to build a campaign or network to support its mission, generate a ton of subscribers and followers, and raise their profile as a “legitimate” advocate on an issue, that’s great. But that’s a campaign. Not a movement.
I spent a chunk of my career working on campaigns, and maybe it’s because I was trained by organizers, but we were clear about the difference between our measurable campaign deliverables (whether a policy was won or lost, how many people turned out for an action or march, etc.) and the more intangible aspiration that our organizing would spark some movement energy on the ground.
Part of the reason that my organization holds up leadership as a key focus area for our research is that we recognize that organizations, networks, movements need strong leaders and also need strong collective leadership. So when we think about the balancing act, it’s not that distributed power and vision / resources are at opposite ends of a scale. In fact, from a movement perspective, distributed leadership actually enhances the movement’s vision and brings more resources to bear on the fights the movement takes on. This is not to say that there aren’t struggles over leadership and between individual leaders/personalities… all of our organizations are made up of human beings interacting with each other, so conflict is going to be inevitable. The challenge is how to make those tensions and conflicts generative.
Nell: As you look at two current social movements — Black Lives Matter, and student protests on college campuses — what are your thoughts on their methods? How successful do you think they have been and will be in the future?
Sean: I think we’re in a very exciting movement moment. When we look back on the 1960s, that decade occupies a special place in our collective imagination because we have enough distance to see how specific moments and events and sparks connect to each other. I’d suggest that the rise of Black Lives Matter is connected to the increasing visibility of student protests on college campuses. And not just in the obvious examples where Black Lives Matter was a rallying cry. Young people play an important role in movements, and they always have.
I worked for several years supporting campaigns to reform our country’s broken and inhumane immigration policy. And young people – whether they were in high school or on college campuses or working to support their families – have been critical to the movement for immigration reform. When I had the privilege to be in the room with young folks to strategize about actions and protest and tactics, there was a ton of creativity and fun that I – as someone in my thirties – had forgotten or lost touch with. I think that the turn we saw towards civil disobedience as a strategic choice was informed by the impatience of young people with an insider political game that wasn’t working for communities.
Progressive activists have gotten back in touch with direct action and civil disobedience in the last few years, and I think that’s an important tool / method to have at our disposal. The reason we build movements is because the polite, official ways of making change haven’t worked. And the way to break through is to assert that Black Lives Matter, or to come out as undocumented and unafraid. The willingness of activists to put their bodies on the line to shut down traffic and disrupt the status quo isn’t just about getting media attention; it’s about demonstrating a commitment to change that inspires others to take their own steps in the ongoing struggle for justice.
To come back to the movement vs. network distinction for a moment … Patrisse Cullors – one of the three women who created #BlackLivesMatter – recently posted a super insightful piece titled “We Didn’t Start a Movement, We Started a Network.” And in that she writes about her concern when the media started referring to the “Black Lives Matter movement” because, as she put it “movements don’t belong to any one person, and we knew that this movement wasn’t started by us.” That commitment to recognizing and lifting up the many amazing organizations doing critical on-the-ground organizing is what makes this movement moment feel really different and important, and hopefully lasting. I think there is something to the fact that many of the most visible leaders today are women who are unapologetically black and feminist. I think the movement for Black lives is a game changer, and I’m really excited to see the movement continue to have more success in the future.
Nell: Because the nonprofit sector is so resource-constrained and competition for dollars is so stiff, there is often a perceived risk to building networks. But how can (and why should) nonprofits overcome this and become more networked?
Sean: That’s an interesting observation, because it seems to me that the resource incentive is for organizations to join networks. Philanthropy doesn’t seem to want to invest in small, local organizations that are doing their own thing. The tendency seems to be for funders to give big grants to national networks and count on them to disperse the money to groups on the ground. Now, I’ve worked for national intermediaries my whole career, so I have seen the way that strategy works to support national campaigns that are disciplined and strategic. But I know that there’s lots of concern – especially on the part of people of color led grassroots organizations – that the “trickle down” strategy isn’t working.
Part of the piece about competition for resources is about leadership, and specifically who is leading the networks versus who is leading the small grassroots organizations that comprise networks. Last year, I worked with some colleagues on a report titled #BlackWorkersMatter, and one of the things that came out from the interviews I did with leaders around the country who are using community organizing as a strategy for addressing the jobs crisis in Black communities is that there are a lot of biases playing out in our sector that leave Black-led – and people of color led organizations in general – at a disadvantage for funding, visibility, all of the currencies that give an organization power and stability right now.
Already, we know from the Daring to Lead survey of nonprofit EDs, that the top-level leadership of the sector is overwhelmingly white. And I think we have to grapple with what it means if the leadership of our networks doesn’t match the demographics of the constituents who come to our organizations for support. BMP just launched a survey on Nonprofits, Leadership & Race, and I’m really curious about what the data will reveal in terms of people’s experiences and perceptions about how implicit biases might be playing out inside of organizations and the nonprofit sector.
Nell: What is or should be philanthropy’s role in building social movements and networks? And is philanthropy currently helping or hurting these efforts?
Sean: I think funders can and definitely do play a role in supporting both social movements and networks, but since investing in networks seems like a clear priority already, I’m going to focus on what funders should do to invest in social movements.
I think the first – and most important – thing a foundation should do if they’re interested in supporting social movements is invest in grassroots organizations that are doing authentic base building, popular education and leadership development. And give them general support dollars for multiple years to do that work. Foundations also should recognize that the slow work of organizing may not yield the kind of metrics and deliverables that have become so central to how we evaluate campaigns.
Beyond that commitment to organizing, foundations can use their unique vantage point to identify organizational leaders and strengthen connections between them. Obviously, money directly to the organizations is important, but sometimes the funding is needed to convene people to discuss, debate and disagree about the movement’s vision and strategy. Having philanthropy support relationship-building between leaders and organizations is really important for any movement ecosystem.
Photo Credit: Building Movement Project
Note: I was asked by The Center for Effective Philanthropy to review their latest research report, Sharing What Matters: Perspectives on Foundation Transparency, released in late February, and provide my thoughts about it for their on-going blog series on the report. Below is my post which originally appeared on the CEP blog.
Sharing What Matters: Perspectives on Foundation Transparency provides some startling data about the state of transparency in the foundation world.
While for the most part, foundation leaders recognize the importance of transparency and are trying to be more transparent, the report shows there is still much work to do.
To me, this question of foundation transparency is part of the larger, ever-present power imbalance in the nonprofit sector between those with money (funders), and those who seek that money (nonprofits). Funders often encourage nonprofits to be transparent about their results and when they have succeeded or failed. But it appears that in these two areas (results and lessons learned), funders are less transparent than either their grantees want them to be, or they would like themselves to be.
This is all critically important because a more transparent philanthropic sector — particularly if foundations were more transparent about how they assess their results and what has worked and what hasn’t — could mean more money flowing to more social change.
CEP’s report delineates two levels of foundation transparency. First is transparency about grantmaking: who leads the foundation, how they have made grants in the past, how they make decisions. The second is transparency about the results foundations themselves achieve: how they assess the performance of their investments, how they share successes and failures.
This second (and I would argue much more interesting) level of transparency is about foundations reporting the very thing they are often asking nonprofits to report: their performance.
In particular, the research uncovers three stark disconnects:
- Foundations Don’t Share How They Assess Their Performance
Of the foundation leaders surveyed, 61 percent said they believe being transparent about how their foundation assesses its performance could increase effectiveness to a significant extent. Yet, only 35 percent of foundations reported actually being very or extremely transparent about it.
- Foundations Aren’t Transparent about Successes and Failures
While 69 percent of foundation leaders think that being transparent about what’s worked in their grantmaking could increase their effectiveness, only 46 percent report being very or extremely transparent about what’s worked. And transparency about what hasn’t worked is even worse. 30 percent of foundation leaders say their foundations are very or extremely transparent about what does not work, which makes failures the lowest-rated area of foundation transparency. And nonprofits agree that foundation transparency is lowest when it comes to sharing what hasn’t worked.
- Foundations Want to Be More Transparent, But Aren’t
While 94 percent of foundation leaders surveyed say that increased transparency is a medium or high priority at their foundation, 75 percent of foundation leaders say that their current levels of transparency are not sufficient. And shockingly, 24 percent of foundation leaders say that nothing limits their ability to be more transparent. So it’s a big priority, yet it’s not getting done.
The report suggests some reasons why transparency about performance and lessons learned is recognized as important, but still far from ubiquitous in the philanthropic sector:
- Lack of Strategy: Foundations aren’t creating clear enough goals around which they can actually assess their performance.
- Lack of Capacity for Evaluation: Foundations aren’t allocating enough resources to assessing their performance.
- Fear of Diminished Reputation: Foundations are afraid of harming their own or their grantees’ reputations by revealing what has or hasn’t worked.
Surprisingly (or maybe not so surprisingly), these impediments to foundation transparency mimic the hurdles nonprofits find (or place) in their own way. Nonprofits often pour as much money as possible into programs and skimp on investing in organization-building efforts like strategy and evaluation. This bias against organization-building is often encouraged (or demanded) by their funders. And so it appears that funders put these same hurdles in their own way. Perhaps foundations, just like their nonprofit grantees, need to acknowledge that with sufficient investments in smart strategy and performance evaluation, greater results can be achieved.
The third and final impediment to foundation transparency about performance and lessons learned is trickier. Fear of harming the reputations of their grantees by sharing lessons learned is a real issue. Foundations tend to invest in packs. So if a foundation reveals investments that have failed, there is a risk that other foundations will flee.
But if we truly want to move to a place where more resources flow to what works, don’t we have to be more transparent about what worked and what didn’t work? If a foundation investment failed because of the foundation’s shortcomings (the investment didn’t fit with foundation goals, the foundation didn’t invest enough, or it didn’t invest in capacity as well as programs), the foundation (and other foundations learning from these lessons) could learn to become more effective investors. And if the investment didn’t work simply because it was the wrong intervention, then isn’t it better to move investments to interventions that do work? Fear can be a debilitating thing, and for the sake of greater results, I think both foundations and their nonprofit grantees must work to overcome it.
Ultimately, the CEP report is hopeful. It uncovers a desire among both foundation leaders and their grantees to move from a basic level of transparency toward a deeper (and more important) one that reveals performance and lessons learned.
Let’s hope that this stated desire for a change in foundation transparency, and the requisite changes in how foundations invest in strategy and performance assessment and overcome fear, becomes reality.
Photo Credit: The Center for Effective Philanthropy
February focused (at least in my mind) on innovations in philanthropy. A new growth capital fund for nonprofits, radical philanthropists, trends in charitable giving, and philanthropy’s role in creating the future. Add to that a bold move by a nonprofit to wrest a lucrative city recycling contract from a for-profit company, research on Millennials’ hopes for the future, and a call for presidential candidates to take a lesson from history. It was a great month.
Below are my picks of the 10 best reads in the world of nonprofits, philanthropy and social change for the month of February. And if you want a longer list of what catches my eye, follow me on Twitter @nedgington.
You can also see past months’ lists of 10 Great reads here.
- There was a really exciting development in philanthropic support of nonprofit capacity in February. Ten donors led by the Edna McConnell Clark Foundation joined together to form Blue Meridian Partners, which will award $1 billion worth of unrestricted, performance-based grants, via 5 to 10-year investments of up to $200 million per nonprofit. According to Edna McConnell Clark Foundation president Nancy Roob, this venture is a new way to invest in high-performing nonprofits, because as she puts it: “Without large, long-term investments of growth capital for organizations with proven results, we’ll continue to salve but not solve our big social challenges.” Yep.
- And speaking of innovations in philanthropy, Inside Philanthropy provides a really interesting profile of philanthropist Farhad Ebrahimi and his Chorus Foundation, which although a relatively small foundation is taking an unusual approach to environmental giving by using a spend-down plan, providing long-term general support grants, and practicing mission investing.
- In analyzing Blackbaud’s 2015 Charitable Giving Report and comparing it to other available data both in the US and Canada, Amy Butcher of The Nonprofit Quarterly finds some interesting insights about how philanthropy is evolving.
- But perhaps it isn’t evolving quickly enough. Minnesota Council on Foundations President Trista Harris recently attended the Abundance 360 Summit about the technology of the future and was disappointed at the lack of a philanthropy presence. As she puts it, “Change in the world and our communities is happening at a breathtaking rate, driven by access to infinite information and exponential increases in computer processing speeds. This accelerating rate of change makes the challenging work of doing good even more difficult. Foundations are trying to make the world a better place, but we are often using yesterday’s information to do so. What if we could predict the future and prepare for the realities that will soon impact our communities? I believe it is our responsibility, as philanthropic leaders, to learn the skills necessary to understand and create the future.”
- Pew Research does an excellent job of unearthing data that relates to the issues of the day. In February I was especially interested in their report that while Millennials are less confident than Gen X or Baby Boomers about America’s future, so were their parents and grandparents when they were young.
- And while we are on the topic of history…Every once in awhile New York Times columnist David Brooks really strikes a chord. In February he used his column to pen a letter to several of the remaining presidential candidates encouraging them to use a “Roosevelt Approach,” as Brooks describes: “Many Americans feel like they are the victims of a slow-moving natural disaster…it’s a natural disaster caused by structural forces — globalization, technological change, the dissolution of the family, racism. A great nation doesn’t divide in times of natural disaster. It doesn’t choose leaders who angrily tear it apart. Instead, it chooses leaders like Franklin Roosevelt and Dwight Eisenhower…they were…able to set an emotional tone that brought people together and changed the nature of Americans’ relationships with one another. During their presidencies, the bonds of solidarity grew stronger and the country more formidable. They were able to cultivate a deep sense of unity, responsibility and sacrifice.”
- Writing in the Stanford Social Innovation Review, Daniela Papi-Thornton, deputy director of the Skoll Centre for Social Entrepreneurship, is quite critical of what she calls, “Heropreneurship,” when social entrepreneurs who have little experience or training are generously funded to solve complex social problems. According to her: “Unfortunately, all too often, the people who get the funding to try their hand at solving global challenges haven’t lived those problems themselves….We’re wasting limited resources on shallow solutions to complex problems, and telling our students it’s OK to go out and use someone else’s time and backyard as a learning ground, without first requiring that they earn the right to take leadership on solving a problem they don’t yet understand.”
- Nonprofit Tech for Good offers a nice list of 36 apps and online tools for nonprofits.
- In an interesting decision, the Minneapolis city council voted to award the city’s 5-year recycling contract to a nonprofit, instead of the for-profit that manages recycling for most of the country. Writing in The Nonprofit Quarterly, James Araci sees an exciting trend: “It’s a smart move for nonprofits to shift perceptions of America’s waste from a commodity to be sold to countries like China to an engine of local job creation and environmental benefits.”
- And finally, head of the Nonprofits Assistance Fund, Kate Barr takes aim at the nonprofit overhead myth by encouraging nonprofit leaders to change their own language and thinking: “If we in the nonprofit sector want to bust the overhead myth and bring attention to the things that really matter, then it’s our responsibility to take the lead by communicating differently and better. In order to take that lead, don’t wait for the question to come in and then argue why the [overhead] ratio isn’t important or meaningful. We have to replace it.” Sing it, Kate!
Photo Credit: jwyg, cropped version of “Work with schools : after a book talk, showing boys gathered…” from New York Public Library