How Founder’s Syndrome Hurt the Komen Foundation

Last week’s stunning PR nightmare at the Susan G. Komen Foundation is a textbook example of how not to run a nonprofit. Komen decided early last week to pull all funding from Planned Parenthood and then went radio silent in response to an increasingly angered social media network. Finally they flipped their original decision while firing the anti-Planned Parenthood vice president for public policy, Karen Handel.

Komen’s PR response was woefully inadequate, their social media efforts were non-existent compared to Planned Parenthood’s, and their board decision-making process was flawed. And all of this follows their brand-busting decision last year to partner with KFC.

Obviously, the organization is not making good decisions.

But few people are placing the blame for these missteps where it should probably go, at the top. Karen Handel herself argued that she wasn’t the only decision maker, “I clearly acknowledge [my role] in the process, but to suggest I had sole authority is just absurd. The policy was vetted at all appropriate levels.”

I wonder if Komen isn’t suffering from classic founder’s syndrome. Founder’s syndrome is when the original founder of a nonprofit (or a leader who has been there for a very long time) creates a culture where:

• Power and influence all reside within the single founder
• The brand of the organization is inextricably linked to the personality of the founder
• Staff are powerless to speak up and be heard when they disagree with certain decisions
• The board of directors merely rubber stamps founder decisions and have no real authority over and provide no strategic direction to the organization
• Decisions are rarely tested or debated

Komen was founded by Nancy Brinker when her sister, Susan G. Komen, died of breast cancer in 1982. For such a massive organization (a 2010 budget of $400+ million), the Komen Foundation only has 9 board members, most of whom are friends or family of the founder . The organization’s structure and behavior have all the signs of classic founder’s syndrome.

In a healthy nonprofit environment, staff are allowed (even encouraged) to push back, ask hard questions, have their dissenting opinions heard.  And the board of directors has the ultimate strategic and fiscal authority for the organization. As a group, they debate and grapple with big strategic decisions. And, as a group, board and staff together are charged with achieving the mission.

When founder’s syndrome is present it can spell trouble for a nonprofit. Far beyond the PR nightmare we have witnessed the past week with Komen, founder’s syndrome can fundamentally weaken an organization. It can make the organization’s funding and brand name overly reliant on one person. It can cause a lack of critical and innovative thinking. Ultimately, it can mean that the organization becomes less about social impact and more about the personality of the founder.

What has played out with the Komen Foundation over the past few months should be a cautionary tale for other nonprofits. To be strong, effective, innovative and sustainable, a nonprofit must encourage a culture of group ownership. It remains to be seen if Komen learns from their mistakes, but at the very least perhaps other nonprofits can.

Photo Credit: Jeffrey

Tags: Karen Handel, Komen Foundation, Nancy Brinker, nonprofit board of directors, nonprofit founder's syndrome, nonprofit strategy, Susan G. Komen Foundation

10 Great Social Innovation Reads: January 2012

I can’t believe that January is already over, it was a complete blur. Nonetheless there was lots to read and ponder in the past month in the world of social innovation. Below are my ten picks of the best reads, but as always, please add what I missed in the comments. And if you want to see other things that caught my eye, follow me on Twitter, Facebook, LinkedIn or Pinterest (I’m starting to really love this new one!).

1. Socialbrite has created a mega calendar of 2012 nonprofit & social good conferences. Perfect for planning your year ahead.




2. In their Fast Company article, It’s Time To Start Judging Nonprofits Like For-Profits, Alexa Clay and Jon Camfield tell donors “Do not be turned off by high overheads. They’re healthy. They mean the organization has a longer-term view on its role in making change.” Amen to that!




3. Crowd-sourcing meets behavioral economics meets iPhone apps. A new approach to getting people to eat better. Love it.




4. FastCompany profiles the business pioneers who really understand and embrace the new chaos in which we all now operate. This should be required reading for any leader (for-profit or nonprofit).




5. I love it when we can use history to understand current trends. Phil Buchanan, CEO of the Center for Effective Philanthropy, reviews historian Oliver Zunz’s new book, Philanthropy in America. In so doing, Buchanan describes 7 “new” philanthropic concepts that really aren’t so new.




6. Jason Cohen from A Smart Bear always has a way of finding hope in the entrepreneurial process. Although this post is focused on “traditional” entrepreneurs, I think it holds for social entrepreneurs as well: Entrepreneurship is a torturous chaos, until it isn’t.




7. I have always said that in order to be a truly effective social change leader, you must be able to fully wield the financial sword. Kate Barr from the Nonprofit Assistance Fund in Minnesota breaks it down in the Executive Director’s Guide to Financial Leadership




8. January saw a pretty impressive mobilization of people via social media to protest against SOPA (the Stop Online Piracy Act) and PIPA (Protect Intellectual Property Act). Dowser helps us understand what it means for online protest more broadly.




9. In an increasingly competitive and resource-strapped environment it is even more critical that nonprofits be able to demonstrate the impact of their work. Here is a great example of how a Michigan arts collaboration demonstrates the economic impact of the arts in their community.




10. Hull House, one of the oldest and most impressive American nonprofit organizations closed its doors in January. The Bridgespan Group explains the implications.

Photo Credit: ilovememphis

Tags: Bridgespan Group, Center for Effective Philanthropy, crowd-sourcing, executive director, Hull House, Nonprofit Assistance Fund, nonprofit conferences, nonprofit economic impact, nonprofit financial management, Phil Buchanan, Philanthropy, PIPA, social change conferences, Social Entrepreneurship, SOPA

10 Great Social Innovation Reads: December

Although December was a “shorter” month because of the holidays, there was still much to read, particularly about what the new year might bring. Below are my 10 favorite reads from the past month, but as always, please tell me what I missed in the comments. And you can read other months’ 10 Great Reads lists here.

1. Since December was the last month of the year, there were lots of look back and look ahead posts. The PhilanTopic blog did a whole series of posts on 2011 Year in Review: What To Expect in 2012. And there is also 50 Economic Numbers from 2011 Too Crazy to Believe. And best of all, the Chronicle of Philanthropy launched a whole Outlook 2012 section of their site.




2. A follow up to the Money for Good report released a couple of years ago, the new Money for Good II report finds that donors would shift $15 billion to more effective nonprofits if they had better information. This is food for thought for the growing efforts (GuideStar, GiveWell, CharityNavigator, to name a few) to track and report on nonprofit results.




3. We are two years into the 5-year Social Innovation Fund experiment launched by the Obama Administration and what have we learned? Carla Javits from REDF and Lisa Jackson from New Profit, two recipients of SIF intermediary funding, offer their views.




4. From Capital Institute, an impassioned plea for foundations to make use of mission-related investments in order to tap into their (much larger) endowment assets and create even more social impact.




5. Rebecca Thomas and Rodney Christopher of the Nonprofit Finance Fund provide a fabulous description of how general operating support, capacity building grants and change capital differ in the nonprofit world. These are distinctions that every nonprofit leader should understand and employ.




6. A new group, Insight Labs in Chicago, provides nonprofits with a roomful of big thinking volunteers to hash out solutions to challenges the nonprofit is facing. Kind of a cool approach.




7. The Dowser blog profiles Project Interaction, a really interesting approach to educating kids. It is design thinking meets public education meets social problem solving. I love it.




8. Jessamyn Lau from the Peery Foundation writes a provocative post on their blog arguing that we need more patient changemakers in the social entrepreneurship field.




9. In the Stanford Social Innovation Review blog, Lisa Witter and Courtney Martin argue that we need to make a distinction between cultural and social entrepreneurship. Social entrepreneurship, they argue, changes markets and systems, whereas cultural entrepreneurship changes hearts and minds. Fascinating.




10. I always like finding a new “tell it like it is” blog, and so I was happy to find Nonprofit Nate, and his post Thank You For Your Trash, about how nonprofits need to take a step back and weigh the costs/benefits of in-kind gifts.

Photo Credit: Kenski1970

The Next Generation of Philanthropy: An Interview with Jessamyn Lau

In this month’s Social Velocity blog interview, we’re talking with Jessamyn Lau. As Program Leader of the innovative Peery Foundation, Jessamyn helps shape the foundation’s strategy, develops programs, strengthens the foundation’s portfolio, and supports existing grantees. Jessamyn’s MBA from Brigham Young University and time spent with Ashoka U have given her the perspective and skill-set to help the foundation develop new methods to support and build the field of social entrepreneurship. Jessamyn is currently working with BYU’s Ballard Center to create the Peery Social Entrepreneurship Program (PSEP), a cross campus initiative providing opportunities for students and faculty to engage with social entrepreneurship through curriculum, experiential learning, and research.

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

Nell: At the Peery Foundation you have done some really interesting experiments with social media, even adding an element of crowd-sourcing via Twitter to your strategic planning process. But recently you have gone back and forth about whether you want to continue your PFWhiteboard blog. What has your thinking been about how social media fits into the overall work of the Peery Foundation?

Jessamyn: One thing we know about social media is that it’s a good tool for is spreading the word about our partners and their work. 90% of what we post/tweet is about our portfolio partners. Every now and then we try to figure out how else to deliberately use social media. We’ve tried stuff that hasn’t worked (so we stopped doing it), and we’ve tried stuff that did seem to yield value for us and others. In general it’s still throwing spaghetti at a wall and seeing what sticks. Intuitively we think social media is a good thing for our creativity, learning, and listening, however, we don’t feel tied to it as a core part of our strategy or practice. When it makes sense we use it, when it doesn’t we don’t.

Nell: What do you think holds foundations back from using social media and embracing greater transparency? What do you think will make that change?

Jessamyn: The tricky thing with social media is it’s really hard to link it to outcomes. Even when tangible examples of outcomes are illustrated it’s often a first-mover advantage and not something that will produce the same results if everyone did the same thing. If foundations could see how social media directly led to more impact it would be an easier sell. It’s a similar story with transparency. Being transparent requires change, time, dedication and a certain amount of risk. Without a clear and strong argument for how that leads to more impact it’s easier not to take the risk and stay quiet.

Another issue is strategic planning, which, at times, can become more of a bane than a boon to foundations. When it comes to social media many foundations think they need a strategy and a full blown plan before they will start using it. As with many things it’s hard to know exactly how Twitter or Facebook will be useful until you give it a go and play around a
little.

For the most part I think the change will only come with an increase of millennial philanthropists, foundation ED’s and program officers who come with a share-as-default mentality and bias towards creative experimentation in public.

Nell: You recently did a fascinating blog post about how the social entrepreneurship movement is encouraging young people to think they can solve the world’s problems, without much real world experience. How do we balance Generation Y’s zeal to find solutions with their youth and lack of experience?

Jessamyn: I don’t think I know the full answer to that, yet. My opinions on this point are still developing as the Peery Foundation works closely with BYU to build a cross-campus social entrepreneurship program. I’m not sure the overall problem is too much zeal or youth, or even too little experience -all of these things provide incredible value in the right context. I think what’s lacking are clearer expectations and support for students to build self-awareness and deliberate preparation in their development as social innovators. As I said, I’m still figuring it out -watch the PF Whiteboard over the coming months for more on this.

Nell: The Peery Foundation is one of few foundations that do mission-related investments. How did you decide to move into that realm and what do you think holds other foundation back from MRIs?

Jessamyn: Our primary function is to support and serve the social entrepreneurs we work with. We try to keep our funding as flexible as possible. Peery Foundation funding is generally unrestricted and the structure of a grant is often co-crafted with the entrepreneur. We have come to realize that entrepreneurs with differing business models, or at differing life-cycle stages, need different types of capital. Once we believe in a SE and their model for addressing poverty we want to always be open to providing the type of capital that they need at the time they need it.

We’re still at an early stage in developing our capacity to provide debt and other funding outside of philanthropy. In our philanthropic funding we’re not paper heavy and our agreements are very trust-based. It was definitely daunting to explore this new realm of traditional investment due diligence and contractual agreements. So far we’ve found the kind of support we need to help us make the leap fairly painlessly through the Toniic Network, and from sources such as Silicon Valley Community Foundation and University Impact Fund, and still feel like we’re able to retain our low-paper, trust based partnership approach to the extent that makes sense.

Nell: In some ways philanthropy has been a bit left behind by the impact investing movement. Why do you think that is and do you think philanthropic giving and impact investing will become more integrated?

Jessamyn: The potential of impact investing is huge, though I’m not sure I agree with the statement that impact investing (ii) has left behind philanthropy (charitable giving from individuals, corporations and foundations totaled over $290B in the US alone for 2010, impact investing is estimated at $50-100B in 2011). Though there is a lot of attention and discussion surrounding impact investing, there are still relatively few organizations actively channeling dollars to ii. Even in the future (when I think ii will absolutely eclipse philanthropy by the numbers), I see ii and philanthropy as very complimentary. In many cases philanthropic capital prepares the way for ii dollars, or continues to fund pieces of a model (overhead or continuing innovation) that ii capital can not.

Indeed, there are many incredibly efficient and effective models of social entrepreneurship with models not conducive to impact investment capital – they will probably always rely on philanthropic dollars. There will always be an important role for philanthropy to play. Philanthropy is the ultimate risk-taking capital. We should not lose sight of this or think that ii is here to replace philanthropy.

Tags: Ashoka U, impact investing, Jessamyn Lau, Mission-Related Investing, Peery Foundation, Peery Social Entrepreneurship Program, PFWhiteboard, Philanthropy, Silicon Valley Community Foundation, social entrepreneurs, social media, Toniic Network, University Impact Fund

5 Nonprofit Trends to Watch in 2012

My annual predictions for the coming year are probably a bit more wishful thinking than actual prediction. It’s hard to say if my predictions for 2011 became a reality for the sector as a whole. But I am ever an optimist and continue to think that the nonprofit sector is getting smarter, more effective, and better able to create real, lasting change in our communities. I truly believe that our challenging economy offers nonprofits a real opportunity to reinvent themselves.

So here are my predictions (hopes) for what the nonprofit sector will move towards in 2012:

1. More Open, Engaging Organizations
   Smart nonprofits are getting better at engaging armies of supporters. In order to do that, they have to cede some control. Nonprofits that can allow volunteers, donors and advocates to engage their friends in their own way will unleash a growing army of support for their organizations. Those  nonprofits that continue to control the message and the method, that only engage their donors when they need money, and ignore the increasingly networked world will wither on the vine.




2. Smarter Boards
   I am an endless optimist when it comes to nonprofit boards of directors. Boards are, for the most part, dysfunctional, but I believe that they are getting smarter and more effective. I think boards will start asking more and better questions, increasingly put themselves to their highest and best use, focus more on strategic issues as opposed to day-to-day tasks, empower their staff leadership to take the organization in more innovative directions, and start putting their money (and their networks) where their mouth is. Because this new harsher environment absolutely necessitates a smart, strategic, innovative board.




3. More Honest Communication Between Nonprofits and Their Donors
   Oh yes, I do, I do believe it. The nonprofit sector’s proclivity to endlessly beat around the bush, tell donors what they want to hear, and sugar-coat the truth will start to wane in the new year. Because the reality is that a severely under-resourced nonprofit sector is the new normal.  That truth is harder and harder to hide. Nonprofits need more money for infrastructure, more and better staff, technology. And they need their donors to step up to the plate and fund it.  Those nonprofits that continue to fear their donors will continue to struggle. Those that take the leap and tell donors how it is, how it REALLY is, will propel themselves out of the starvation cycle.




4. More Strategic Approaches to Solving Social Problems
   It’s increasingly meaningless for nonprofits to talk about the “good work” they do. In order to attract donors, nonprofits must be able to articulate what they do and how it results in change. This necessitates an overall strategic approach to their work. From creating a theory of change, to developing on a comprehensive strategy, to raising the money required to execute on that strategy, to aligning money and mission, to evaluating their efforts, to translating their evaluation into a compelling story, nonprofits have to get more strategic. Those organizations that take a step back and create, and fully integrate their organization into, a long-term plan will be much more successful and sustainable.




5. More Financed Nonprofits
   As part of this more strategic approach, nonprofits will (must) move towards a broader, more strategic approach to funding their work. They will realize that the hamster wheel of chasing receding dollars in a scattered approach just isn’t going to cut it anymore. As the fundamental economic restructuring that we are currently experiencing continues, nonprofits must create a financial model for their work.  The financial status quo just will no longer work in the nonprofit sector.

I’m not a fortune teller, but I am an optimist. I have tremendous hope for our great nonprofit sector. We may be in the depths of an on-going, structurally transformative recession, but it in no way is the death knell for the nonprofit sector. It is simply an opportunity for nonprofits to get smarter, more honest, more open, more strategic, and more sustainable. And that’s exciting.

Photo Credit: riptheskull

Tags: Board of Directors, capacity capital, challenging economy, nonprofit donors, nonprofit fundraising, nonprofit predictions for 2012, nonprofit strategy, nonprofit trends, Philanthropy

Articulating Your Nonprofit’s Value Through a Theory of Change

If you want to raise more money, chart a strategic direction, make your nonprofit more effective, get your board engaged, and achieve your mission, you need a theory of change. A theory of change is basically an argument for how your nonprofit turns community resources (money, volunteers, clients, staff, materials) into positive change in the community. Articulating this simple argument can dramatically increase your nonprofit’s effectiveness and financial sustainability. In order to help your nonprofit create a theory of change, I’m delighted to announce that we are releasing today our newest Step-by-Step Guide, Creating a Theory of Change.

More and more donors and board members want to understand how the nonprofit they are involved with creates social change. A theory of change helps your nonprofit do that.

A theory of change can strengthen your nonprofit in many ways:

• As the backbone of a case for support or other fundraising collateral. With a theory of change, you can articulate the impact you are working to achieve, in a compelling way.
• To revise the vision and mission of your organization, making them stronger and more compelling.
• As a filter for new opportunities as they arise. Do new opportunities fit within your theory of change? If not, perhaps you should not pursue them.
• To guide your strategic planning process. If you understand the organization’s overall theory of change and what you exist to do, it is much easier to chart a future course.
• To get board members and other volunteers, friends and supporters engaged, committed, and excited about your work. If people understand the bigger picture, they will be more inclined to give more time, energy, and other resources to the work.
• To help staff understand how their individual roles and responsibilities fit into the larger vision of the organization. This can increase staff morale, productivity, communication and overall commitment to the organization.

The Creating a Theory of Change Guide is organized around the parts of a Theory of Change. In each of the 8 sections of this guide there is a series of questions, which you will answer. Your answers to these questions become the basis for your final theory of change.

The sections of the guide are:

1. Community Need
2. Inputs
3. Activities
4. Outputs
5. Outcomes
6. Impact
7. Final Theory of Change
8. Next Steps

You can find out more about the Creating a Theory of Change guide here. And for information on our other Step-by-Step Guides, like the Revenue Plan Guide, Business Plan Guide, Case for Support Guide, check our Tools page.

Tags: logic model, nonprofit case for support, nonprofit evaluation, nonprofit fundraising, nonprofit outcomes, nonprofit outputs, nonprofit strategic plan, Social Velocity Step-by-Step Guides, theory of change

Why Nonprofit Overhead is Destructive

It’s that time of year when donors make key decisions about their end of year giving. But a recent post on the Social Earth blog advising donors about questions they should ask nonprofits perpetuates thinking that actually hurts, rather than helps the nonprofit sector. The author, Tarini Chandak, asks “How do you know where your charitable dollars are going? Are they going to the cause you want to support or are they going to administrative and fundraising expenses?” In reinforcing old, and destructive binary thinking about program vs. overhead expenses, Tarini is doing nonprofits and their donors a real disservice.

Tarini lists 4 key questions she thinks every donor should ask of the nonprofits they consider donating to:

As various charities vie for your charitable donations, there are many questions you can ask them directly, including:

1. How much goes to the cause? How high are their expenses?
2. How efficient is their fundraising? What is their cost-per-fundraised-dollar ratio?
3. Is the charity run properly? How efficient and effective is their human capital? Management team?
4. Do they even need your money? Will your money just be lying around in their reserve?

I think questions #2 and #3 are excellent, but questions #1 and #4 perpetuate thinking that holds the nonprofit sector back.

Let’s start with Question #1: “How much goes to the cause? How high are their expenses?” As I’ve written before, the distinction between program (or “cause”) and administrative expenses is meaningless at best, and destructive at worst. If a nonprofit organization is creating change, then everything they do is in support of that change. How can a program run if there is no financial engine (fundraising) to fund it? If there is no building or space to house it? If there is no financial management or regular audits? If there is no regular evaluation of whether the program is making a difference? How can you possibly separate “program” from “overhead?” We must move beyond this distinction and encourage nonprofits to raise (and donors to give) more capacity capital, or the money that nonprofits so desperately need to create effective and efficient organizations.

Tarini’s Question #4 “Do they even need your money? Will your money just be lying around in their reserve?” is equally troublesome because it reinforces the backward notion that nonprofits should not have a reserve fund. As I (and others) have written before, we have to get away from the nonprofit taboo that operating reserves are wrong. Nonprofits cannot plan for the future, have a sustainable financial model, experiment with program changes, take risks, or any of the other things that are absolutely necessary to creating social change, without some operating reserves. If nonprofits are continually forced to go month to month without any cushion they will never emerge as strong, sustainable organizations capable of creating lasting change.

We must move away from thinking that encourages nonprofits to scrape by without the tools and infrastructure they desperately need. We must stop measuring nonprofit performance with meaningless financial metrics and instead evaluate nonprofits on their ability to deliver change. If a nonprofit is creating real change, does the minutia of how they spend money really matter?

Photo Credit: just_a_name_thingie

Tags: nonprofit capacity capital, nonprofit financial management, nonprofit fundraising, nonprofit operating reserves, nonprofit overhead, nonprofit starvation cycle, program vs. administrative expenses, Social Earth

The Road to a Better World is Jammed with Red Bikes

Note: This post originally appeared on the Change.org Social Entrepreneurship blog last year.

There is something pretty amazing going on in Denver, and it might just change the world. B-cycle, a nonprofit that provides rental bikes around the city, has found a cheap, fun way to make Denver a cleaner city and its inhabitants and visitors healthier.  I spent last weekend playing tourist in Denver and the experience was made so much better, and cleaner, because of the rows of red B-cycle rental bikes around the city. Denver is demonstrating that change really is possible, especially when it’s easy and fun.

Denver is the first U.S. city to do what European, Canadian, Chinese and Mexican cities have already done–share bikes. Here’s how it works. You buy a short or long-term “membership” via credit card online starting at $5. Then grab one of the 500 bikes waiting for you at the 50 kiosks around the city (found through a pretty cool iPhone app) and ride. When you’re done, return it to any of the kiosks, and your card will be charged for the amount of time you rode. The first 30 minutes are free, and it goes up in increments of around $1-2 for each 30 minutes after that.

As tourists, my husband and I found enormous value in B-cycle. Because of the availability of the shared bikes, we decided not to rent a car. By the end of 3 days we had (according to the computers embedded in our bikes) ridden 49 miles, burned 1,944 calories, created a carbon offset of 46 pounds and saved $25.76 in gas money. In addition, we saved about $150 in rental car costs and parking.   Our total bike rental fees was only $26. So we saved about $150 in costs, got some fabulous exercise, did not pollute the city, and actually got a much more intimate view of the city than we would ever have by car. Not bad for a holiday weekend.

But it’s not just for tourists, by far. The idea is that Denver residents can climb on a bike “for trips that are too far to walk but too short to drive.” With a shared bike you can run an errand, get out for a bit at lunch, travel from the bus stop to your office, and much more.

Denver’s B-cycle program is actually part of a national B-cycle organization, which is a partnership between Humana, Trek Bicycle and Crispin Porter + Bogusky. Denver is B-cycle’s first installation, but according to their online vote of which cities B-cycle should expand to next, they have big plans for growth. And in fact, Boston and Minneapolis are already slated to install bike sharing programs later this year.

Denver’s B-cycle is funded through an impressively diverse mix of corporate sponsorships (like lead sponsor Kaiser Permanente), federal energy block grants (no city funding), foundation grants and earned income (through memberships and usage fees). I haven’t seen their financials, but I’d guess that in a few years when user volume is high enough they could probably become self-sustaining, the holy grail for nonprofit organizations.

What makes me most excited about B-cycle is that it is solving several problems simultaneously, yet it is incredibly simple and fun, making it much more likely that people will adopt the solution. B-cycle truly proves the Fun Theory, that change is possible when it’s fun to change.

Photo Credit: Denver B-Cycle

Tags: B-cycle, bicycle sharing, corporate sponsorships, Fun Theory, public transportation, social change, Social Entrepreneurship, transportation issues