As 2013 comes to a close, and we all head off for some much deserved rest and relaxation, I wanted to thank all of you wonderful Social Velocity readers. You are an inspiring group of people working tirelessly to make this world a better place. I am very thankful to be able to work and interact with you all through the Social Velocity blog.
Before I take a break from the blog until January, I want to provide a list of the ten most popular Social Velocity blog posts from this year in case you missed some of them. You can also read the 10 Most Popular Posts lists from 2011 and 2012.
I wish you all a peaceful and relaxing holiday season. I look forward to talking and working with you in 2014. Happy Holidays!
The 10 most popular Social Velocity blog posts of 2013 were:
- 5 Nonprofit Trends to Watch in 2014
- 5 Taboos Nonprofits Must Get Over
- Why Your Board Should Raise 10% of Your Nonprofit’s Budget
- 5 Reasons Your Nonprofit Isn’t Raising Enough Money
- Addressing the Nonprofit Fundraising Elephant in the Room
- Find and Keep a Great Fundraiser
- 5 Questions to Get Your Board Moving
- Getting Real About Nonprofit Overhead Costs
- NextGen Donors and the New Golden Age of Philanthropy
- The Nonprofit Sector Needs to Get Over the Fear Thing
And if you want to make sure not to miss a single post in 2014, sign up for the Social Velocity e-newsletter (and download a complimentary copy of the Financing Not Fundraising, vol. 1 e-book in the process).
Photo Credit: Wikipedia
In today’s Social Velocity interview, I’m talking with Katherine Lorenz, president of the Cynthia and George Mitchell Foundation. In late 2012, Forbes Magazine named Katherine “One to Watch” as an up-and-coming face in philanthropy. She also serves on the board of directors of the Environmental Defense Fund, the Institute for Philanthropy, Puente a la Salud Comunitaria, and the Association of Small Foundations.
Nell: There is a lot of interest in the next generation of philanthropists—Millennials who stand to inherit the largest wealth transfer in history. How do you think this next generation of philanthropists will be different than their predecessors and why?
Katherine: I do believe this next generation of philanthropists will be different than their predecessors. People tend to become interested in a specific issue or cause based on a personal experience—something that impacts their lives profoundly. It is only natural that this next generation of philanthropists will do their philanthropy differently; they grew up in a world that looked very different than the world their parents and grandparents grew up in. Things like 9/11 and social media were formative experiences for Millennials, so it should not be surprising that they will think differently than previous generations—just as the Great Depression had such an impact on the way their grandparents lived their lives and did their philanthropy.
A recent study by 21/64 and the Johnson Center on Philanthropy about next gen donors showed that this generation is more clearly driven by impact and effectiveness in their philanthropy than generations before them. They also want to be more hands-on in their engagement with an issue or an organization—they want to serve on boards or get involved in a more concrete way than just writing a check. They look at financial resources as only one tool in the toolbox, and seek to bring many other resources at their disposal to create change in the world.
Nell: Do you believe that next gen donors will actually divert more money to organizations that can prove they’ve created social change? Are we going to see the needle move in terms of funneling more money to proven social change efforts under their watch?
Katherine: I am not sure if we will actually see Millennial donors divert more resources to organizations that can prove they are creating social change. While I do believe this generation will ask for more metrics, and want to know the impact they are having more than previous generations, I think this group will also be open to taking more risks as they search for innovative solutions. In taking more risks, there will be more failure but also potential for more significant social change if the risk pays off. In sum, I think next gen donors will risk more and fail more than previous generations, although this should create more innovative methods that address the issues they care about.
Nell: What is your view on how family philanthropy evolves over time? For example, your grandparents’ generation’s understanding of and opinions about climate change are quite different than views about climate change now. How do changing views affect a philanthropic approach over time?
Katherine: I think that family foundations evolve with generational changes more in how they address issues than in what they address. Often a family holds very strong beliefs and values, and those are passed down from generation to generation. For example, my grandfather funded sustainability issues for more than 40 years, primarily funding large institutions or creating new institutions, and trying to bring businesses into the conversation. While climate change was an issue he cared about, the larger picture of how the earth will sustain a growing population with finite resources drove him. Those values and interests are acutely present in his children and grandchildren, although how we do philanthropy to address these issues is slightly different.
With more science available, it is clear that climate change is very clearly the biggest threat to a sustainable planet, and we are using different tools than my grandfather did to address the issue—more grassroots organizations, more policy and advocacy work, and less of a focus on big institutions. Our values around this topic very much came from my grandfather’s passion, but our approach in addressing the issue is quite different. I think a difference in generational approach is common in family foundations.
Nell: How do you think philanthropy could be more effective and better help nonprofits create change? What shifts in the philanthropic landscape are you particularly excited about seeing?
Katherine: I think one of the biggest problems in the non-profit sector stems from the relationship between the donors and their grantees. Donors often ask grantees to do special reporting or won’t pay for overhead expenses or ask them to do something outside of their current strategy. Grantees are often compelled to do these things in order to obtain funding, although sometimes they spend more time trying to please donors than doing the work at hand. Donors have unrealistic expectations of grantees, and non-profit leaders usually spend more time fundraising than working on the issue they were funded to address.
I would really like to see donors and grantees operate more like partners, and less like one is doing a favor for the other in exchange for funding. I would like to see donors fundamentally shift the conversation from a focus on lowering overhead costs to a focus on maximizing social benefit. Who cares if overhead is high if the organization is actually making a dent in the issue they’re trying to solve?
One shift I see in the philanthropy world that excites me is the growing number of groups that exist to help donors be more effective. Donor education is growing in popularity. Inheritors are realizing that doing philanthropy well is a serious job and requires training. As the field of donor education grows and formalizes, I think we will see donors doing a better job of allocating resources for social benefit.
Photo Credit: Cynthia and George Mitchell Foundation
There were some really great articles and discussions in the social change space this past month. From new attempts to put philanthropy under the microscope, to analyses of Silicon Valley’s contributions to social change, to the difference between market innovations and social innovations, to Millennial giving, there was a lot to think about.
Below are my picks of the 10 best reads in the world of social innovation in September. But please add what I missed in the comments.
The 10 Great Reads lists from past months are here.
- Silicon Valley has been getting into the social change game, but some aren’t impressed with their contributions so far. David Henderson takes Silicon Valley to task for focusing their technology “innovations” only on broken nonprofit fundraising models (Google’s announcement in September of a new fundraising app, One Today, is an example of what he’s talking about). And Charles Kenny and Justin Sandefur seem equally unimpressed arguing that Silicon Valley’s view that technology can end global poverty is “wildly overoptimistic.”
- And speaking of social change and business, Daniel Goldberg makes a very interesting (and helpful) distinction between “market innovations” (“an opportunity for profit that also happens to help people…and [is] effective precisely because [it] so cleverly ride[s] the market wave”) and “social innovations” (which “produce value by filling gaps left by the market…a business opportunity in the classic sense, but a systematic market failure that required a social purpose to address”). Much of impact investing, he argues, falls into the first camp, whereas social impact bonds fall into the second.
- It is crazy (and terrifying) how the wealth of America is increasingly concentrated in a small group of people at the top. The rate at which it is happening is mind blowing. The 400 richest Americans are worth $2 trillion, which is a $300 billion increase from last year and double what it was a decade ago. And in 2012 the top 10% of earners brought home more than 50% of the total U.S. income, which is the highest level ever recorded. Kind of depressing, isn’t it?
- But there is hope. Clara Miller, formerly head of the Nonprofit Finance Fund and now head of the F.B. Heron Foundation, is one of the leading visionaries in the social finance space. Her recent article is a must read and explains the dangers of nonprofit growth without adequate capital and what funders can do to prevent it.
- Paul T. Hogan, VP of the John R. Oishei Foundation, argues that funders should focus on building nonprofit organizations: “The development of the nonprofit organization provides plenty of factors to evaluate and many outcomes to strive for. It can also satisfy the funder’s obligation to effectively steward resources insofar as an organization is being helped to last for the long term and have a much greater chance of effectively achieving its, and therefore the funders’, goals.” Oh, if only more foundation leaders thought that way!
- Pablo Eisenberg writes a fairly vehement rant against philanthropy for being an increasingly closed loop. He argues that their insularity “keeps philanthropy from solving serious problems” and that we need “foundations and big donors to realize they don’t have all the answers. Nonprofits should have a greater role in driving the agenda.”
- September saw the annual Social Capital Markets Conference and one of the interesting things to come out of it was a new Community Capital Symposium that immediately preceded SoCap this year. CoCap brought non-accredited investors (with a net worth below $1 million) and social entrepreneurs together to talk about community-focused investing. It’s an interesting financial innovation to watch.
- Over the month of September, GrantCraft, a project of the Foundation Center, ran a 4-episode podcast series talking about and with Millennial philanthropists as a complement to the Johnson Center NextGen Donor Report about Millennial giving that came out earlier this year. Fascinating stuff.
- And then on the tactical side, HubSpot offers some great insight on What Millennials Really Want From Your Nonprofit’s Website.
- I always love urban food innovations, perhaps it’s because they are addressing several social problems at the same time (urban decay, obesity, economic decline, environmental degradation). And so I was interested to see that urban rooftop farming is a new trend.
Photo Credit: UWW ResNet
As kids across the country head back to school this month I thought I’d share a great video that my son’s English teacher had them watch. It is an “Open Letter to Students Returning to School”, but in essence it is an engaging and energizing endorsement of public education. It is targeted to this current generation of American students with the aim of helping them understand the unique opportunity they, and we, have been given with public education.
How we educate this next generation is really about the future of our country and our world. And I found this video incredibly inspiring. Education, at its core, is the ultimate social innovation, isn’t it?
There is a lot of talk lately about how the world is changing thanks to the Millennials, the demographic force of people born between 1981 and 2000 who promise to fundamentally change the world as we know it.
But what I continue to wonder is whether Millennials will fundamentally shift how money flows to social change.
Here are the shifts I wonder if Millennials will help us make:
More Social Change Money
Will a significantly greater amount of money begin flowing to organizations that are working on positive social change? For the past four decades only about 2% of the U.S. Gross Domestic Product has gone to philanthropy. That’s a pretty big trend to buck. Millennials stand to enjoy the largest wealth transfer in America history. Will more of that money flow to philanthropy? Will Millennials be able to move the needle on the 2% and find ways to funnel more money to social change?
More Money Flowing to Proven Impact
Will more money start flowing to organizations that can prove that they have created social change? Traditionally, philanthropy has not been terribly strategic, following emotion rather than data. However, new research claims that Millennial donors are more focused on impact than their predecessors (see the Millennial Impact Report, The Next Generation of American Giving report, and the NextGen Donors report) and are more committed to seeing their money flow to organizations that can prove they are actually accomplishing social change. (Although some argue that Millennials will actually not give any differently than their predecessors did.) So once Millennials become the philanthropic force everyone predicts will they actually invest that money differently?
More Financial Vehicles for Social Change
Will more financial vehicles become available for social change efforts? As Millennials start to control the wealth in this country, will they use new tools like impact investing to funnel more money, beyond just philanthropy, to social change efforts? Will they be able to connect impact investors and philanthropists and their respective pools of money? Will Millennials’ demonstrated interest in social change translate into new ways to fund that social change?
More Delivery Vehicles for Social Change
Millennials, so far, tend to be more entrepreneurial than their predecessors. And at the same time there are more organizational structures, beyond the traditional nonprofit organization, for making social change happen, from B Corps to Lc3s to for-profit social businesses, to social intrapreneurship. But it remains to be seen whether these new structures, and others yet to come, will stand the test of time. And whether Millennials can transform traditional nonprofits to be more entrepreneurial too.
There certainly can be hype around the promise of a generation. But I’m excited to see what the Millennials bring to the world of social change.
Photo Credit: Next Generation of American Giving Report
Last Thursday was the 4th annual Millennial Impact Conference (MCON#13) hosted by the Case Foundation and Achieve, a fundraising agency specializing in Millennial donor engagement. The conference is an opportunity to analyze the Millennial generation (ages 20-33) and how they think about and engage in social change.
Because the Millennial generation is so large and they are coming of age in a time when technology and how we communicate are changing so rapidly, they will have a big effect on the sector.
As part of MCON, Achieve annually releases a study on the philanthropic interests of the Millennial generation. Their online survey of over 2,500 Millennials (and in-person user videos of 100 Millennials) found some interesting things about how this generation connects, gets involved and gives. And their findings seem to echo earlier studies about Millennial donors and their interest in impact.
Achieve’s study found that “Millennials aren’t interested in structures, institutions, and organizations, but rather in the people they help and the issues they support.”
Here are some more interesting findings about Millennials and their engagement with social change:
- Behind email, Facebook is the next preferred method by Millennials to stay current on organization issues.
- 83% of Millennials use smartphones.
- Mobile friendly websites are the most important feature on the smartphone device that Millennials want from organizations.
- The number 1 action on websites and social networks taken by Millennials is sharing content.
- Advance online training and knowing how the volunteer experience will affect the people served is a key interest to Millennials.
- Run/Race/Walk events are the highest peer fundraising approaches used by Millennials.
- Asking for a donation to an organization instead of receiving personal gifts is a growing favorite among Millennials.
- Online websites are still primarily used and preferred when Millennials donate.
- Millennials are more likely to donate when the organization explains how the gift will impact an individual.
The full report along with Millennial user testing videos (which are fascinating looks into how Millennials react to and engage with nonprofit websites) are available here.
The implications for the nonprofit sector are important. And they underline the fact that nonprofits cannot ignore social media and the Millennial generation. Nonprofits must embrace the fact that the world is very different now than it was even 5 years ago. They must embrace and find ways to engage this younger generation. It’s about empowering Millennials to tap into their networks to find advocates, volunteers, supporters for the cause.
So get out there and start experimenting.
Photo Credit: The Millennial Impact
June was all about attacking some pretty fundamental roadblocks in the way of social change. From the pivotal “Pledge Against The Overhead Myth,” to a new database for all nonprofit organizations, to moving philanthropists from innovators to capacity builders, to ideas for growing the level of giving, it seems June was about putting everything on the table and exposing what stands in the way of progress.
Below are my 10 favorite social innovation reads in June. But, as always, add your favorites to the list in the comments below. And if you want to see my expanded list, follow me on Twitter, Facebook, LinkedIn, or Google+.
You can see the 10 Great Reads lists from past months here.
- The big news in June was GuideStar, Charity Navigator and BBB Wise Giving Alliance’s Open Letter to the Donors of America and their kick-off of the Pledge to End the Overhead Myth. The three nonprofit review organizations are on a quest to expose the destructive nature of the overhead myth.
- This exciting announcement was followed quickly by some great articles. Kjerstin Erickson’s (former Executive Director of FORGE) eye-opening post about how the overhead myth can ruin a great nonprofit. And Ann Goggins Gregory (most famous for the seminal Nonprofit Starvation Cycle article in a 2009 Stanford Social Innovation Review that arguably started the entire overhead debate) great post about what nonprofits can do to speed adoption of the idea of overhead as myth. And Phil Buchanan from the Center for Effective Philanthropy chimes in with what foundations can do. And writing on the Grantmakers in the Arts blog, Janet Brown seems to agree, arguing that “with more efforts for honest assessment and honest communication between funders and nonprofits, we can stop dancing solo and begin dancing as real partners.”
- Antony Bugg-Levine, from the Nonprofit Finance Fund, gets down to brass tacks, gleaning 3 things that funders can do to help nonprofits from the NFF’s most recent State of the Sector survey.
- Echoing these same themes, Dan Cardinali, President of Communities in Schools, argues in the Huffington Post Impact blog that “Philanthropists…must come to grips with their new role as capacity builders rather than innovators.” Amen to that!
- But the reality is that foundations aren’t using innovative tools already available to them. A recent study by the Indiana University Lilly Family School of Philanthropy found that only 1% of US foundations are using PRIs (program-related investments), which I think is an enormous missed opportunity.
- Keeping with their ultimate goal of building the data infrastructure necessary for social change to thrive, Markets for Good announces the new BRIDGE project, which assigns all nonprofits a “numerical fingerprint” so that we can eventually understand the global social sector at scale.
- The annual unveiling of philanthropic giving numbers shows the same result, giving as a share of Gross Domestic Product has not strayed far from 2 percent over the past four decades. Suzanne Perry offers some reasons why, past failed attempts to grow the figure, and new ideas for moving the needle.
- The Dowser blog interviews Patrick Dowd, founder of the Millennial Trains Project, a ten day transcontinental train journey where each of the 40 Millennial riders profiles a crowdfunded project to build a better nation.
- If you wonder whether social media can actually move social change forward, check out this fascinating case study. A Facebook app encouraging organ donation resulted in an initial 2000% increase in organ donor sign ups. Who knows if those rates will continue, but the experiment definitely demonstrates the power of social media.
- There is a lot of hype in the world of social innovation, and two contrarians offer some thought-provoking perspectives about digging beneath the hype. First Daniel Ben-Horin is fed up with social entrepreneurs who don’t realize what a long haul social change is, when he notes “This making a difference stuff, it turns out, can be a real grind.” And Cynthia Gibson argues that we need to create a culture within the social change space that “encourages healthy skepticism.”
Photo Credit: mindfire3927
In this month’s Social Velocity blog interview, I’m talking with Perla Ni, CEO of GreatNonprofits. Perla was the founder and former publisher of the Stanford Social Innovation Review, the leading journal on nonprofit management and philanthropy. Prior to her work at SSIR, Ni co-founded Grassroots Enterprise, later acquired by global public relations firm, Edelman. A frequent speaker on nonprofits and philanthropy, she has been named a “Top Game Changer” by the Huffington Post.
You can read past interviews in the Social Innovation Interview Series here.
Nell: GreatNonprofits is an interesting spin on the growing nonprofit ratings market in that you gather consumer reviews of nonprofits. Why do you think what donors, volunteers, and clients have to say about a nonprofit is important to potential donors?
Perla: We think people with direct experience with a nonprofit, especially the nonprofit’s beneficiaries, are in the best position to tell us about the difference that that nonprofit has made in their life or their community.
In the seven years that we’ve been doing this, we have learned a couple of things about collecting beneficiary feedback. It’s not only the right thing to do – to empower the voice of beneficiaries so that they are treated with dignity – it is also the smart thing to do. It’s the smart thing to do because it is highly correlated with actual program outcome. We’ve seen the linkage between effective outcomes and organizations that collect and listen to their beneficiaries.
Although there are ongoing conversations about the best metrics for judging quality, there is agreement that, for almost every sector, consumer satisfaction and feedback drive quality through transparency and competition.
A trend toward human-centered design, where products are designed and rapidly iterated upon with feedback generated from users, is another example of how client responsiveness leads to improved outcomes.
GreatNonprofits has been collecting feedback about a wide variety of health, human service, arts and education organizations.
Nicole Molinaro, former executive director of Communities in Schools of Pittsburgh-Allegheny County, a Pennsylvania-based dropout prevention program serving at-risk youth, found great value in constituent feedback, “What interested us in being open to reviews from our constituents is really the desire to improve our services. Without hearing feedback about what we’re doing well and what we can do better, we really can’t make improvements in how we serve our kids.”
Due in part to feedback submitted by students, the organization added a student lounge as a safe, accessible place for the students to spend time in before and after programs.
In a recent GreatNonprofits survey of nonprofits, we found that a large number of nonprofits are listening to beneficiary feedback and some are taking action.
- 78% share reviews with board members
- 72% share reviews with staff
- 54% share reviews with volunteers
- 49% share reviews with donors
- 23% share reviews with clients
- 26% say reviews have impacted their operations
In fact, in Learning for Social Impact, a report for donors and foundations by McKinsey & Company, the number one recommendation given to funders is for them to “hear the constituent’s voice.”
These rich, detailed and concrete experiences from people who have actually experienced the work of the nonprofit—been fed by the food bank, helped by the after-school program—are a better way to discover the most effective charities than through tax forms. According to our survey of our users:
- 90% of donors say that reading reviews of clients help them understand the work of the nonprofit
- 80% of donors say that it influences their decision to give
Nell: How does a great customer experience (a review from a volunteer that had a great experience with a nonprofit) translate into a nonprofit’s ability to create social change? Or should or does a donor care about that?
Perla: In the excellent article “Listening to Those Who Matter Most, The Beneficiaries” in the Stanford Social Innovation Review, the authors show that, in the studies about school performance and patient outcomes, there is a high degree of correlation between listening to the student/patient and success.
Donors care about real world outcomes–how is my money helping?
Nell: What do you make of the growing debate about what information donors want and actually use in making their funding decisions? Do you think how donors make their giving decisions and what information they use to make those decisions has or is changing?
Perla: It starts with the donor. Donors want to improve the world, to make a difference. And the donors typically want to spend their time and money effectively. How do you find a nonprofit that is aligned with your passion and making a real difference on the ground?
Well, it requires listening to the voices of people on the ground – the ex-felon in a job training program, the student receiving mentorship, the volunteer who organized the environmental conference, the donor who visited the school in Cambodia – who have seen the first-hand impact of nonprofits.
These are not the usual people that donors listen to – they may be different from us in so many ways – income, class, geography, or race.
And if the donor wants to empower real, tangible changes in the lives of people and communities they want to improve, he/she needs to have the discipline to do that. It’s part of the first rule of philanthropy “don’t do something about me, without me.”
It’s a radical discipline, transparency and accountability that we must hold each of ourselves to, including the donor.
We don’t see this discipline as just funding decision-making. We see this as community engagement. The donor and the beneficiaries needs to be part of this philanthropic marketplace together to share insights on what works, what doesn’t yet and what could help to make a greater difference.
Nell: You were also the founder of the Stanford Social Innovation Review which is currently celebrating its 10th year. 10 years in to this world of social innovation what do you think we have to show for it? Have we gotten better at solving social problems?
Perla: If you Google “social innovation,” you get 648 million search results. This wasn’t at all the case 10 years ago! We pretty much invented that term.
One of the accomplishments, I think, is that social issues are no longer ghettoized as nonprofit issues. It’s not just a nonprofit problem or a business problem or a technology problem. Social innovation, which was always focused on finding new ways to solve problems, agnostic of the approach of the sector, is broadening our framework and ways that we network to achieve our goals. Now published by the incredibly prolific Stanford Center on Philanthropy and Civil Society, SSIR reaches business people, foundations, technology leaders, and nonprofits. Social innovation is about bringing an open, entrepreneurial outlook to enterprises – start-up and mature organizations alike. We’d also like to think that it helped popularize other concepts such as social entrepreneurship, which has blossomed into an area of study in school, as well as create a new kind of career identity. At the core is a belief in not being complacent, not doing the same old same old, or talking to the same people. It’s really about creating a broad mindset for ideas and different people.
Nell: Much speculation has occurred about what effect millennial donors will have on philanthropy, because of the huge wealth transfer they will enjoy, their large numbers and the new ways they are sharing information about their giving. What are your thoughts on how or if Millennial donors will change philanthropy?
Perla: Millenials are more civic-minded, more public about their giving and more likely to be bifurcated in their giving – give locally and internationally.
They may find the idea of donating to their parents’ alma mater or their parents’ charity as rather stuffy. They are a more connected, shop local, eat local, biking/walk generation – and so they are more drawn to the idea of helping their local community. They are also well-traveled and more connected internationally, so they have a high interest in giving internationally as well.
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