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Leadership

Weaving Nonprofit Capacity Building Into Philanthropy: An Interview with Kathy Reich

Kathy ReichIn today’s Social Velocity interview, I’m talking with Kathy Reich, Director of Organizational Effectiveness Grantmaking at the David and Lucile Packard Foundation. Kathy leads a cross-cutting program to help grantees around the world improve their strategy, leadership, and impact. Her team makes grants on a broad range of organizational development issues, from business planning to social media strategy to network effectiveness.

She also manages the Packard Foundation’s grantmaking to support the philanthropic sector. She has been with the Foundation since 2001, and previously held positions in the Organizational Effectiveness and Children, Families, and Communities programs. Prior to joining the Foundation, she worked in a non-profit, on Capitol Hill, and in state and local government in California.

You can read other interviews in the Social Velocity Interview Series here.

Nell: There is often a chicken or the egg scenario in the nonprofit sector where nonprofit leaders are hesitant to tell funders their real struggles and needs for fear of appearing unworthy of investment, and philanthropists are hesitant to stick their noses in the business of the nonprofits they fund, so organizational capacity needs are not openly discussed or addressed. How does the Packard Foundation uncover the organizational needs of your grantees and what would you advise other funders to do in order to have more open and transformative discussions with their grantees?

Kathy: Well, I try not to tell other people—funders or nonprofit leaders—what to do! But I can tell you what works for us at the Packard Foundation. First, we encourage each of our program officers to learn about the organizational strengths and challenges of their grantees, and to weave capacity building into grantmaking strategies. That’s a big part of the work of the Organizational Effectiveness team here at the Packard Foundation.

But we also have a separate Organizational Effectiveness (OE) program, staffed by its own program officers and with its own budget, to help grantee partners strengthen their fundamentals so they can focus on achieving their missions. Once a non-profit gets a grant from any Packard Foundation program, they’re also eligible to apply for an OE grant. We support a wide range of projects to promote individual and team leadership, organizational planning and development, and the development of healthy networks.

The application process is pretty simple and straightforward. It starts with a letter of inquiry where our grantee partners have to answer just a handful of questions: What are the objectives of your project and what do you expect to accomplish? How will this project support your organization in meeting its goals, and over the long term, enhancing its effectiveness? What special challenges or changes have caused your organization or network to focus on management and organizational issues at this time? How do you propose to use Foundation funds? Who from your organization’s staff and board has made the commitment to lead the project?

Here’s the most important part of our approach: We work very hard to be responsive to the needs of our partners. We never say, “We think you need a strategic plan, and that’s the only thing we’re going to fund.” We listen to the grantee’s assessment of their strengths and challenges, and serve in a coaching role to help them develop the OE project that best meets their needs.

Folks can read more about the Organizational Effectiveness program on our website, or on our wiki page, where we share resources, evaluations of the program, and other information.

Nell: Leadership development is something that is fairly prevalent in the for-profit sector – it’s understood that good leaders need coaching and support along the way – but leadership development is rarely supported in the nonprofit sector. Why do you think there is that disparity and what do we do to change it?

Kathy: I think you’re right — the lack of investment in leadership development and talent management in the nonprofit sector is a significant issue. We don’t have any shortage of talented, passionate people entering this sector. But I believe that we lose too many of them before they rise to senior-level leadership positions.

Some of that brain drain happens for financial reasons: people are staggering under the weight of educational debt, or they’re lured away by more lucrative career prospects in the private sector. But much of the loss of talent is preventable. People leave because they feel burnt out and undervalued. They can’t forge career pathways and can’t access meaningful professional development. They sometimes have lousy managers. Their jobs don’t offer opportunities for promotion, or sufficient work/life/family balance.

That is all stuff that the nonprofit sector can fix. As a sector, we can even tackle some of the thornier issues around compensation and educational debt. And funders can lead the way. But philanthropy is not doing that. Rusty Stahl at the Talent Philanthropy Project, a Packard Foundation grantee partner, points out that between 1992 and 2011 foundations spent, on average, about 1% of grant dollars on nonprofit talent development. I’m not sure why there’s been a lack of investment in leadership development in the nonprofit sector over time — especially when virtually everyone seems to agree that effective leadership is one of the keys to lasting social change.

I do see some glimmers of hope. In the OE program last year, 21 of the 86 grants we awarded focused on leadership development, including projects that invested in interventions like executive coaching, board development, succession planning, and executive transition at key grantee organizations. And a number of efforts are underway throughout the Foundation to support existing and/or emerging leaders in the issue areas where we work. Clearly, though, much more is needed.

Nell: There has been a concerted effort in the past year to overcome the “Overhead Myth,” the idea that nonprofits should spend as little as possible on “overhead” (administrative and fundraising) expenses. But there is still much work to do before that idea becomes mainstream in the philanthropic sector. How do we change funder (and nonprofit leader) thinking about overhead?

Kathy: I’m a fan of so many leaders and organizations who have spoken out on this issue, including Packard Foundation grantee partners like Guidestar, California Association of Nonprofits, and Grantmakers for Effective Organizations. They’ve done a great job of making a research-based case that arbitrary, low overhead rates don’t capture the true cost of delivering non-profit programs and services. I think that there are a couple of common-sense things that funders and nonprofit leaders can do to keep this debate at the forefront of people’s minds.

First, prepare real budgets. If the funder tells you, “You can only have $25,000 for this project,” that’s fine. That’s their budget. But submit a budget for the full cost of the project, including your personnel, facilities, and other costs of doing business. Let them see what their funding covers, and what it does not. Be honest if you do not know where the rest of the money will come from. At least it will spark a good conversation with your funder about the gap, and about your real costs. Most funders do not penalize honesty. If the funder does penalize honesty, their money probably is not worth your trouble.

Second, define what goes into your overhead rate, and stick with it. Many funders have a “rule” about acceptable overhead; 15 percent, 10 percent, even 5 percent. But most do not have a standard definition for what’s included in that rate. You should have one. Define it, calculate it, and then defend it.

Nell: Philanthropy is a very personal and values-driven thing, but at the same time we need to funnel more philanthropic money towards the most effective solutions. Do you think it’s possible to get more philanthropists to give based on results rather than interests and values, or can we somehow better combine the two drives?

Kathy: I think combining values and a focus on results is not just desirable — it’s essential. None of us goes into social change work with a completely cool, dispassionate lens. We go in with passion. We want to make a difference. We bring our whole selves to this work. That’s what makes it wonderful, and that’s why we stay in it.

At the same time, resources are limited — money, people, time — and we have to be sure they’re being well-spent. Ideally, we want to make sure those resources are being better-spent than they could be on other endeavors.

At the Packard Foundation, we try to craft a balance. Our mission—to improve the lives of children, families, and communities, and to restore and protect our planet—derives directly from the values and beliefs of our founders. The way we go about that work is deeply rooted in five core values, which also come from our founding family — integrity, respect for all people, belief in individual leadership, commitment to effectiveness, and the capacity to think big. But we also are committed to scientific rigor, evaluation, and most importantly, learning. We care not only about what grant funds accomplish, but also about how we do that grantmaking, engage with grantees and improve over time. You can read about some of what we’ve accomplished over the years on our new digital timeline.

Photo Credit: Packard Foundation

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Why Nonprofit Donors and Boards Must Get Over Overhead [Video]

As I mentioned earlier, I am building a video library of topics that can spur discussion among your board and donors. So, to add to that library, today I’m talking about why we need to get over overhead.

Traditional wisdom is that nonprofits should keep “overhead” (administrative, fundraising, systems, technology, staffing) costs as low as possible. This is a really destructive idea, and we need to move beyond it. But we will only get there if nonprofit leaders across the country start having that conversation with their board members and donors. Because if we can move beyond overhead, we will have a much stronger, more effective nonprofit sector.

The transcript of the video is also below. And you can view all of the Social Velocity videos on the Social Velocity YouTube channel.

To learn more about getting over overhead and raising capacity building dollars for your nonprofit, download the Launch a Capacity Capital Campaign Guide.

Hi I’m Nell Edgington from Social Velocity. Today I want to talk about why nonprofit board members and donors need to get over overhead.

So overhead is the idea that nonprofit organizations can separate what they spend on programs and services, the mission work of the organization, versus what they spend on infrasturucture, staffing, systems, fundraising function, administrative costs. All of those things in the second bucket are typically considered “overhead.”

Now overhead, I think, is a very meaningless distinction in the nonprofit sector, and we need to move beyond it.

It’s meaningless because you can’t have exceptional programs and services if you don’t have solid staff behind them, if you don’t have evaluation systems to figure out if you are making a difference, if you don’t have a fundraising function to bring the revenue in the door to make those programs and services operate, if you don’t have the infrastructure, the technology, all of the things that you need to make those programs and services run well.

We also need to get over overhead because if you think in terms of overhead as a nonprofit organization you will not seek, nor will you attract, the funding to invest in infrastructure, the funding that so many nonprofit organizations desperately need, the funding for capacity building, for strong staff, for great technology and systems, for evaluation programs, etc. If you think in terms of overhead you are going to keep those costs as low as possible and you won’t try to bring the money in the door to support your capacity as an organization.

Finally, we need to get over overhead because if as a nonprofit organization we are measuring our work in terms of how much we spend on overhead and keeping that as low as possible, we are not measuring our work based on whether we are actually making a difference, whether we are actually creating social change. And we need to move to a place where we are evaluating nonprofit organizations based on their results, based on the social change and the outcomes that they are achieving, not how they spend their dollars.

So those are the reasons I think overhead is very destructive in the nonprofit sector, and I hope that you will talk with your board and donors about how we need to get over overhead. Good luck!

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10 Great Social Innovation Reads: May 2014

social innovationDoes it seem like there is more open debate lately in the social sector? Or maybe I’m just attracted to discussions where the gloves come off and (let’s hope) transformative conversation happens. That was the case in May where philanthropic transparency, nonprofit leadership, and donor acceptance policies were all up for debate.

Add to that some really interesting developments in the new “sharing economy”, net neutrality, and use of big data, and it was another great month in the world of social innovation.

Below are my 10 favorite reads from the last month, but please add what I missed to the comments. And if you want to see a longer list of great reads, follow me on Twitter, Facebook, LinkedIn or Google+.

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

  1. Writing in the New York Times, Frank Bruni criticizes some nonprofits for accepting donations from donors who actually undermine the cause. These nonprofits, in effect, end up whitewashing the philanthropists, “Some [philanthropy] is prophylactic or penitential: The polluter supports environmentalists, while the peddler of sugary soft drinks contributes to campaigns against obesity.”

  2. And philanthropists themselves were far from criticism this month. Writing in The Atlantic, Benjamin Soskis believes it is critical for a healthy democracy that philanthropists go under the microscope, in fact: “Given the power that private philanthropy can wield over public policy, a spirited, fully-informed public debate over the scope, scale, and nature of that influence is a democratic necessity.” Phil Buchanan from the Center for Effective Philanthropy agrees. And to that end, May saw the launch of Philamplify, the National Committee for Responsive Philanthropy’s attempt at a Yelp-like review site of foundations.

  3. In a long (but well worth the time) piece, Albert Ruesga from the Greater New Orleans Foundation lays bare his antipathy toward his fellow philanthropists: “We grantmakers, myself included, act as arrogant elites, drawing arrows and triangles on the whiteboards of our well-appointed conference rooms with no one around to challenge our flawed thinking. We strut about like giant roosters puffing out our breast feathers and clucking incoherently about ‘disruption’ and ‘theories of change.’ We look foolish to everyone except ourselves and those even more foolish than we are.”

  4. But there are bright spots. Daniel Stid from the Hewlett Foundation takes to the Hewlett blog to refreshingly demonstrate funder transparency and explain “What Went Wrong in Our Democracy Grantmaking.” And Peter Buffett, son of Warren Buffett and author of a scathing critique of philanthropy last year, has a fascinating debate/very civilized exchange with ethicist William MacAskill about how effective (or harmful) philanthropy can be.

  5. We are living in the era of big data, and this month there were some really interesting examples of how data can be used to make things better. First, UPS uses data to improve driver performance and profitability. The University of Texas at Austin is doing some fascinating things with data to help at-risk students graduate. And some nonprofits are using data to improve fundraising effectiveness.

  6. Last month saw the first-ever sharing economy conference. This new idea – that our economy is evolving to a point at which goods, services, ideas are all shared – has serious implications for the social sector. Lucy Bernholz and Beth Kanter break it down for us.

  7. And a key part of that sharing economy is an open Internet. But the FCC is considering changes to rules that would allow a “two-tiered” Internet where those with means can pay more for faster service. The Benton Foundation did a nice summary of developments around net neutrality. And the Electronic Frontier Foundation organized to let voices be heard by the FCC.

  8. Innovation is hard work. So when the work of creating social change drags you down, you only need look as far as Steven Pressfield for inspiration, “When we’re stuck, when we’re freaking out, when it all seems too much too soon too crazy, remember: that’s only how it seems to us, confined within our limited point of view. From the universe’s perspective, all is as it should be. Sooner or later, you and I will stop fighting and let the symphony/supernova/baby be born.”

  9. Using data from the Nonprofit Finance Fund’s most recent State of the Sector survey, work by state associations of nonprofits, and new Uniform Guidance for federal grants from the federal Office of Management and Budget, Beth Bowsky from the National Council of Nonprofits charts some positive developments in government funding the true costs of nonprofits’ work.

  10. Never one to sugar coat it, in an interview on the Idealist blog, Robert Egger describes his vision for the next generation of nonprofit leaders: “Our society needs an elevated nonprofit sector, but to get there, we need people who are prepared to challenge antiquated ideas about the role we play in the economic and political process.”

Photo Credit: Mo Riza

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Catalyzing Nonprofit and Philanthropic Effectiveness: Fay Twersky

Fay TwerskyIn today’s Social Velocity interview, I’m talking with Fay Twersky. Fay, an expert on philanthropy and the nonprofit sector, serves as the Director of the Effective Philanthropy Group at the William and Flora Hewlett Foundation. In that capacity, she oversees five functions including cross-foundation support, evaluation and organizational learning as well as grantmaking in support of organizational effectiveness and a strong philanthropic sector. Prior to Hewlett, Twersky was at the Bill & Melinda Gates Foundation, designing and developing their Impact Planning & Improvement division.

You can read other interviews in the Social Velocity Interview Series here.

Nell: As head of the Effective Philanthropy group at Hewlett you obviously think a lot about how nonprofits and philanthropy can work better together. There is a very real power imbalance between those doing the work (nonprofits) and those funding that work (philanthropists). How can we overcome that power imbalance so that there are fewer hurdles standing in the way of the work?

Fay: If we are being totally honest, I am not sure that we ever fully overcome the power imbalance. But, the first step is, simply to be more honest. Candor and openness can go a long way. One the funder side, if funders are more open and candid about what we can and cannot do with respect to funding, if we clearly communicate about our priorities, strategies, goals, and funding criteria, that will help a lot. If we listen to nonprofits with open ears and keep an open mind, that will help build more productive relationships. If our funding is fair and flexible, and we recognize through our support that nonprofits need overhead to run a high performing organization, our grantees might experience us as more respectful and fair.

On the nonprofit side, I think it is also essential to be more honest. Actually, what I really mean here is to be more realistic – more realistic about expected results, about timeframes and what it takes to run an effective organization. In addition to saving lives, reducing carbon emissions, or improving reading skills, nonprofits also have to pay the rent and buy computers. Be honest with yourselves and your funders about what is required to run a top notch nonprofit. We need to know. We also need to know if we are making the wrong assumptions or ill-conceived decisions.

Nonprofits are often complicit in the funding game of over-promising and under-delivering. It may be that funders have more power to change that expectation, and we should, but nonprofits can also do their part by regularly educating us on the art of the possible.
The truth is, we need each other in order to create the change we seek in the world.

Nell: One of the goals of the Effective Philanthropy group is to improve the overall effectiveness of the philanthropic sector. That is a big undertaking. How do you go about that?

Fay: Not alone!

The philanthropic sector is growing at a tremendous rate. In 1990, there were 32,000 foundations in the United States. Today, there are 115,000. And, that number is likely to continue to grow. And those foundations are dedicated to a huge diversity of needs. The Hewlett Foundation views our philanthropy grantmaking as a highly leveraged way to improve all of philanthropy—so that the many areas of need are funded and supported in smart and sustainable ways.

We have a modest budget for grantmaking to improve the sector, and we pursue two strategies to achieve that goal. Our first strategy focuses on producing and disseminating knowledge about how to do philanthropy well. Our grantees in this portfolio include groups like the Stanford Social Innovation Review, Grantmakers for Effective Organizations and the Foundation Center. We are hosting a convening of our knowledge grantees this month to seek their input into our strategy going forward and any changes we should consider. Our second strategy is brand new and currently in development. One of our primary goals with this new strategy is to pursue grantmaking collectively with other funders. The strategy will likely focus on ways to promote more openness among foundations. More on that later in 2014 as it develops.

Nell: Another aspect of your work is to make grants to nonprofits for organizational effectiveness, or in other words, capacity building. But few foundations recognize the need to invest in stronger, more effective nonprofit organizations. What is Hewlett doing to convince more philanthropists to invest in organizational effectiveness?

Fay: We think it is essential to support nonprofits to be high performing organizations, and not projects for hire. We do this by providing flexible general operating support when we can and also through organizational effectiveness grants – grants that are explicitly targeting improvements to the strategic and operational aspects of an organizations. These are typically smaller grants, but, according to our grantee perception report survey results, they are greatly appreciated by our grantees. A lot of the credit for our program really goes to the Packard Foundation, on whose program ours is modeled.

We regularly consult with colleagues in philanthropy about how we approach our work and sing the praises of our OE grants, but we know that there is still a long way to go among foundations overall. I don’t know the numbers, but I am hopeful that we are seeing a positive trend as there does seem to me to be more interest in supporting organizational capacity. This year, we are conducting our first ever comprehensive evaluation of our organizational effectiveness grantmaking program, and we are committed to widely sharing the results and any resulting refinements to our approach.

Nell: There is a growing push to encourage nonprofits to evaluate their work. But there is a chicken or the egg situation where nonprofits can’t find the funding to create performance management systems, and so they can’t demonstrate the value of their work in order to secure more funding. How do we solve that?

Fay: There is so much I could say about this topic having worked on all sides of this equation–in a nonprofit, as an evaluation consultant and as a funder. But, I will limit myself to a couple of points.

First is funding. Foundations need to provide funding for measurement. Nonprofits must build it in as a line item in every budget. Measurement is not a nice to have. It is a need to have. Just like rent.

Second is mindset. Measurement is not for punishment, but for learning. Funders need to approach it this way too. This is related to your first question, about removing hurdles in the funder/grantee relationship. If funders want to have more honest relationships with our grantees, we have to encourage the sharing of news about disappointing results and be prepared to provide continued support for course correction. Not every time of course.

I have had several different experiences that relate to mindset. One was as a funder with a reluctant nonprofit. This was a situation where I had questions and concerns about a particular program we were funding and suggested to the CEO that they conduct a formative evaluation of the program and that we would fund the full costs of the evaluation. He was reluctant and protective of his program. He in a sense fell in love with the program instead of its purpose. After several conversations, he was still unwilling to engage in an evaluation and given that circumstance, which I experienced as a lack of openness to learn, we stopped funding that program. It is essential for all of us to have the courage to learn and change.

I have had many more wonderful experiences with supporting nonprofits to measure results. The best of these do not just deliver good news. They are evaluations that produce information for nonprofits to learn from, to be challenged by and to catalyze improvement. And, when nonprofits share those lessons with us, we get smarter. Because most of the knowledge out there is within reach of the nonprofit organizations. And, as they say, knowledge is power. Perhaps the secret to this funder grantee relationship is recognizing that true power imbalance should rightly tip in the nonprofit’s favor.

Photo Credit: William and Flora Hewlett Foundation

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Inspiring Social Change

As I mentioned earlier, leadership is on my brain this month. And I was reminded over the weekend that inspiration and leadership go hand in hand. You cannot lead real change unless you are able to inspire those you are leading to do great things.

On Saturday I watched the movie Invictus with my sons. The movie chronicles the 1995 Rugby World Cup championship which South Africa hosted shortly after the end of apartheid and the election of their first black president, Nelson Mandela.  Mandela saw, before anyone else, the opportunity the World Cup offered to unite a country divided by decades of segregation.

Mandela also recognized in François Pienaar, the captain of South African rugby team the Springboks, the opportunity to create a real leader. Although at first a reluctant leader, Pienaar finds inspiration from Mandela and uses it to rebuild his disheartened team and eventually go on to win the World Cup.

Although the movie came out several years ago it seems particularly timely now because of Mandela’s recent death. The movie demonstrates what an amazing social change leader Mandela was. He had the uncanny ability to recognize people’s strengths and offer them an opportunity to rise to heights they had never imagined.

It seems to me that what separates great leaders from mediocre leaders is this ability to inspire others to greatness. A true leader asks us to rise above circumstances and do more, be more than we ever thought possible. It is at those times that real change can happen.

Through a seemingly innocuous sporting event, Mandela and Pienaar took the rubble of a horribly segregated and angry country and built unity. It is amazing to watch:

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New Book: Reinventing the Nonprofit Leader

Nonprofit leaderMy focus this month at Social Velocity is nonprofit leadership. As I mentioned earlier, May’s webinar is Reinventing the Nonprofit Leader. And I’m delighted to release today, as promised, the companion book, Reinventing the Nonprofit Leader.

Here is an excerpt from the new book:

The new millennium has been a difficult one. A crippled global economy, threatening climate change, crumbling education and healthcare systems, and a widening income gap comprise a few of the social problems we face.

And as our social challenges mount, the burden increasingly falls to the nonprofit sector to deal with the fall out.

So it is time for a new kind of nonprofit leader, one who has the confidence, ability, foresight, energy, and strength of will to lead the nonprofit sector, and our communities, forward. Indeed it is up to the leaders of our great nonprofit sector, to face, rather than shrink from, these many challenges.

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 social change.

So in the hopes of inspiring nonprofit leaders to claim their rightful place as true heralds of social change, I have written this book. It is based on my many years of coaching nonprofit leaders to success. This book lays out the elements that those nonprofit leaders have learned in order to embrace their role as reinvented nonprofit leaders.

The reinvented nonprofit leader:

  • Unlocks the Charity Shackles and demands to be treated as an equal and critical part of the economy, the community, the solution.
  • Refuses to Play Nice and gets real with funders, board members, partners, and staff who are standing in the way of progress.
  • Embraces Strategy that moves beyond just “doing good work” and gets real results.
  • Uses Money as a Tool because big plans will not come to fruition without a sustainable financial engine behind them.
  • Demands Real Help and the tools necessary to achieve the mission because the best leaders recognize weakness and solicit help to address it.
  • Breaks Down the Walls of the organization and lets the world in as fully engaged partners, advocates, and supporters.
  • Remembers the Dream that got them here in the first place because often it is the big idea that propels great leaders forward.

It is a tall order, but true leadership is.

We no longer have the luxury of mediocre leaders. These times demand confident, capable, engaging leaders who are a beacon to a society whose mounting problems are overwhelming at best.

While it may seem like an impossible transition to become a new kind of nonprofit leader – one who is more entrepreneurial, innovative, confident and strategic – let us remember that nonprofit leaders have always been entrepreneurs. They have recognized some sort of disequilibrium in our society and have created, out of nothing, an organization, a solution and an assembly of staff and volunteers to fix it. In essence, I am simply encouraging you, the nonprofit leader, to claim your rightful place.

The reinvented nonprofit leader is confident, engaged, and savvy. She will, I have no doubt, lead this great nonprofit sector, and all of us who benefit from it, to new heights.

So how do you become a reinvented nonprofit leader? Let’s take these one by one…

 

If you want to read more, download the Reinventing the Nonprofit Leader book now.

And if you register for the webinar before May 21st the companion book is free. You can register for the Reinventing the Nonprofit Leader webinar here.

 

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7 Ways to Kiss Fundraising Goodbye [Slideshare]

I am really in to Slideshare lately. I uploaded my first Slideshare presentation, Calculating the Cost of Fundraising, last month and people seemed to really like it. So I plan to create regular Slideshare presentations and share them on the Social Velocity Slideshare site.

Today’s Slideshare is 7 Ways to Kiss Fundraising Goodbye. Traditional nonprofit fundraising is broken. It lock nonprofits in an endless cycle of chasing low return activities. A much better approach is to create a sustainable financial model that aligns well with your mission and core competencies. Nonprofits must move from Fundraising to Financing.

If you want to move your nonprofit from a Fundraising to a Financing approach, download the Build a Nonprofit Financing Plan Step-by-Step Guide.

 

7 Ways to Kiss Fundraising Goodbye from Nell Edgington

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The Tricky Work of Scaling Nonprofits

Social Impact ExchangeThe idea of “scale,” or growing to a point at which you are solving the underlying social problem, is a tricky one in the nonprofit sector and something that is a growing topic of conversation.

Jeff Bradach from The Bridgespan Group launched a new 8-week blog series on the Stanford Social Innovation Review blog last month about what he calls “Transformative Scale.”

Bradach asked leaders and thinkers in the scale movement – like Risa Lavizzo-Mourey from the Robert Wood Johnson Foundation, Billy Shore from Share Our Strength, Wendy Kopp from Teach for All, and Nancy Lublin from Do Something – to contribute their insights to the series. Bradach is doing this because he believes we have not yet figured out how to grow solutions to a point at which they are actually solving problems. As he wrote in his kick-off post to the series:

Over the past couple of decades, leaders have developed a growing catalog of programs and practices that have real evidence of effectiveness. And they’ve demonstrated the ability to successfully replicate these to multiple cities, states, even nations in some cases, reaching thousands or even millions of those in need. Despite all this progress, today even the most impressive programs and field-based practices rarely reach more than a tiny fraction of the population in need. So we find ourselves at a crossroads. We have seen a burst of program innovation over the past two decades; we now need an equivalent burst of innovation in strategies for scaling.

One of the places where scale has been an on-going topic of conversation is the annual Social Impact Exchange’s Conference on Scaling Impact. Now in its fifth year, this conference next month in New York City brings together “funders, advisors and leaders to share knowledge, learn about co-funding opportunities and develop a community to help scale top initiatives and build the field.” The conference is organized, in part, by the Growth Philanthropy Network, which “is creating a philanthropic capital marketplace that provides funding and management assistance to help exceptional nonprofits scale-up regionally and nationally.”

I’m excited to be attending this year’s conference and participating in a panel called “Business Models for Sustainability at Scale.” From my perspective, one of the biggest hurdles to scale is a financial one. Very few nonprofits have yet figured out how to create a sustainable financial model, let alone how to create one at scale. And this hurdle exists for many reasons, including: lack of sufficient capital in the sector, lack of sufficient management and financial acumen among nonprofit leaders, an unwillingness among funders to recognize the full costs of operation. So I’m excited to be part of this important conversation about how we can actually create financially sustainable scale.

It will be interesting to see how the conversations at the Scaling Impact conference – led by rockstars in the field like Antony Bugg-Levine from the Nonprofit Finance Fund; Tonya Allen from the Skillman Foundation; Heather McLeod Grant, author of Forces for Good; Paul Carttar from The Bridgespan Group; and Amy Celep from Community Wealth Partners – will relate to the perspectives of those writing in the “Transformative Scale” blog series. I wonder where there will be overlap and where there will be disagreement or even controversy. Scale is an incredibly difficult nut to crack. And as Bradach rightly states, no one has figured it out yet.

I will be posting to the blog during the conference about what I’m hearing and where there are common threads or separate camps.

I hope to see you there!

Image Credit: Social Impact Exchange

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