Philanthropy
What Change Does Your Nonprofit Seek?
What I love best about my job is opening nonprofit leaders to new and bigger possibilities. Last week was a busy one. I was in Phoenix for part of the week speaking at the Planned Giving Roundtable Conference and then I flew to New York to lead a board retreat at the National Guild for Community Arts Education.
When I am speaking to or leading a group, I love the moment when they move from discouraged, exhausted or burned-out, to energized by new ways of thinking.
At the Planned Giving Roundtable I delivered a keynote address about the power of a theory of change. A theory of change is such an incredible tool for helping a nonprofit articulate what value they provide the community. And once you have articulated that value, a theory of change is a jumping off point to:
- Chart a strategic direction, which guides the action of the organization and focuses limited resources
- Prove the results the organization is achieving, which allows the nonprofit to,
- Attract more support, leading to the holy grail in the nonprofit sector,
- Sustainable Community Change
So the theory of change serves as the fundamental building block in making that process happen, like this:
Because the theory of change is so instrumental, I believe that every nonprofit organization that is working toward social change should have one. Without a theory of change, you don’t know what you are trying to accomplish, how you will get there, or whether you have accomplished it, and you certainly won’t attract the funding necessary to get there.
So once I (hopefully) convinced the group in Phoenix about the importance of a theory of change, I flew to New York City to help the board and staff of the National Guild for Community Arts Education actually develop their own theory of change.
It was so exciting to see the group work together to articulate how their organization puts community resources to work towards community change. It’s not easy to come to agreement about exactly what change an organization is working towards, which is why I think it is important to have an outsider leading that process.
At the end of the day, board and staff were energized and excited about their evolving theory of change and how it could help them chart a new strategic direction, focus resources, and attract more support and momentum.
That is the moment I love. When people who are so passionate and working so hard for community change, can take a step back and articulate how and why they do the work that they do. Because it is in taking that big step back that you can begin to develop a strategy for bringing hoped for change to fruition.
If you’d like to have me come speak to your board, staff, conference or event about a Theory of Change, check out my Speaking page, or email info@socialvelocity.net.
Photo Credit: Dean Morley
Listening to Nonprofit Beneficiaries: An Interview with Perla Ni
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.
Why Your Board Should Raise 10% of Your Nonprofit’s Budget
It’s no secret that nonprofits struggle with money. In fact, the Nonprofit Finance Fund’s most recent State of the Nonprofit Sector Survey found that 41% of nonprofit respondents ran a deficit in 2012. If we really want to rewrite this rule for the nonprofit sector, we need to make some pretty big changes.
So here’s a radical idea.
What if every nonprofit board were responsible for bringing in 10% of their nonprofit’s annual operating budget?
That means that if your nonprofit’s budget is $1 million, your board would be responsible for raising $100,000 each year. They could do that through a combination of give/get activities, meaning they could all write personal checks (at whatever level makes sense for them individually) and then use their unique skills, experience and networks to raise the remaining amount.
That’s a crazy idea, right?
I don’t think so. Here’s why.
The Board Must Really Understand the Money Engine
A board of directors simply cannot separate themselves from the financial engine of their nonprofit. The entire board must fully understand and contribute to how money flows to the organization. They cannot argue that money is the purview of the staff; money HAS to be part of the board’s job. Until we make the board really participate in making the financial engine run, they won’t be able to have substantive conversations about how to raise or spend that money.
The Board Must Share the Burden
I’m so tired of silly, small board fundraising goals. Does a 15 member board that brings in only $15,000 out of a $1 million budget really make a difference? Absolutely not. That’s pennies. If they are truly going to lead the nonprofit that they serve, they must share the financial burden. Ten percent of the operating budget starts to make a significant dent, so let’s start there.
The Board Must Tap Into Their Unique Assets
I am not suggesting that we force every board member to ask individuals for money. Far from it. Rather, I’m arguing that nonprofits start getting really strategic about tapping into each individual board member’s strengths and assets in order to make a bold fundraising goal a reality.
But you can’t just turn to the board and tell them to bring 10% in the door. Some things are going to have to dramatically change in order to make 10% a reality.
Here’s what you have to do:
- Work one-on-one with each individual board member to create an annual plan for how they will meet their part of the goal.
- Give the board lots of different ideas for how they can meet their goal.
- Provide the training, materials, and education they need to execute on that individual plan.
- Hold each individual board member accountable for their individual plans and goals, check in with them every month to see how they are progressing.
- Have the board report at every meeting about their progress on the 10% goal.
If we really want to see a shift in how the nonprofit sector is funded, we need to make some pretty radical changes to business as usual. So start to entertain the idea. What would it look like if your board brought in 10% of your annual budget?
If you want help transforming your board, check out the Board Engagement consulting services I provide.
Photo Credit: Richard Matthews
10 Great Social Innovation Reads: May 2013
May was about the “era of adaptation.” We are living in an age where change is a true constant, and we must adapt. We must adapt how we use technology, give money, get educated, use data, and the list goes on. It is an exciting (if sometimes overwhelming) time filled with opportunity.
Below are my 10 favorite social innovation reads in May. 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 my newest addition, Google+.
You can see the 10 Great Reads lists from past months here.
- The Era of Adaptation is upon us, so says Antony Bugg-Levine from the Nonprofit Finance Fund, and as such “adaptation requires nonprofits to invest in building and sustaining their organizations, not just running programs.” Amen to that!
- And how people give is definitely undergoing change. A really interesting article in the Wall Street Journal profiled Laura and John Arnold and their scientific approach to giving away their billions, while hoping to redefine philanthropy in the process.
- Google announced a new giving app that allows users to give $1 donations to nonprofits. Doesn’t sound like much, but nonprofits should keep an eye on this. As Google continues to be everywhere, this is an innovation where you may not want to be left behind.
- Warren Buffett and his sister Doris are doing something pretty interesting this summer. They are offering the first ever philanthropy MOOC (Massive Open Online Course). Over six weeks, participants will learn about philanthropy and then some participants will be given money to give away to nonprofits.
- As women increasingly control wealth, Anya Kamenetz from Fast Company asks the question, “Will Women Billionaires Make Better Philanthropists?”
- And then there’s technology and all that it is changing. Writing as a LinkedIn Influencer, David Kirkpatrick describes the coming of age of the Millennial generation and the opportunity (and burden) of deciding whether to use the gift of technology for the greater, or just their own, good.
- Big data has the potential to create enormous change as well. Regardless of your politics, Obama’s reelection team included some really great minds and one of them is now working on using big data to solve social problems.
- And how about higher education? Ben Thurman breaks down the growing innovations in higher education on the Dowser blog. From online courses, to apprenticing, to Silicon Valley’s growing interest in higher education innovations.
- Writing on the Stanford Social Innovation Review blog John Gillespie provides a very useful set of 5 questions nonprofits should ask themselves to determine if they are truly ready to scale.
- In a thought-provoking two-part series (here and here), Caroline Fiennes explains why nonprofits should monitor, but not evaluate, their work, and the role social scientists play in the evaluation of big ideas. Hers is a great distinction, but I’m not sure how we execute on the concept in the real world.
Photo Credit: AngryJulieMonday
5 Priceless Gifts A Board Member Can Give Her Nonprofit
Board members sometimes stand in the way of a what their nonprofit needs most. I’ve talked before about the meaningless at best and destructive at worst distinction between “overhead” and “program” dollars. And board members often are as bad as donors at forcing nonprofits to ignore the very real costs of the work they do and their very real need for organization building dollars.
But board members could break this pattern by helping their nonprofit uncover, plan for and fund the staffing, technology, expertise and systems required to make the organization more effective at creating change.
Board members need to put their weight behind organization building. And they can start by giving their nonprofit these five priceless gifts:
- Permission to Talk About Real Costs. Stop asking your nonprofit staff to get by with less and less. Stop telling your Executive Director to lower the salary they can offer a talented Development Director, not to spend money on technology, or to use volunteers when they need experts. Instead, start asking what the real costs of the work are and how much you truly need to raise to accomplish your ambitious organizational goals.
- The Support of the Board. Once you start talking about real costs, you need to marshal the rest of the board to support organization building. Boards are often led by a vocal few who convince the rest to go along with their plans. If you can be that vocal member who articulates the need for organization building, how it will result in greater results over time, and how the board must be the champion of and seed investor in organization building, you can create a stronger, healthier nonprofit.
- A Capacity Plan. With the board in support of organization building, it’s time to put an organization-building plan in place. Ask the head of your nonprofit to spend some time coming up with a capacity building plan that will take the organization to the next level. Then present that plan at the next board meeting for a substantive conversation about what is truly holding the organization back and what it would take to move forward.
- An Organization Building Investment. Instead of asking that your annual donation go to your favorite program, be the lead investor in this new capacity building plan. Organization building dollars are very difficult to find. So those closest to the organization should be the first to step up and invest in capacity. And don’t just give the required amount. Make an investment that is significant to you. If you truly believe in this organization, take out your checkbook and make it hurt.
- Access to More Building Dollars. But don’t just stop there. Think strategically about who you could convince to join you in strengthening the capacity of the organization. Then make the case for why a Development Director, or a strategic plan, or an evaluation study, or new technology will grow the results your nonprofit is achieving. If board members start making a compelling case to their friends and colleagues about the importance of capacity building dollars, the sector could be transformed.
Board members can be an instrumental driver of stronger, healthier, more effective nonprofit organizations. But in order to get there, board members have to understand and embrace their leadership role in making organization building a reality.
If you want a roadmap for making your board more effective, register for our How to Build a Groundbreaking Board webinar.
Photo credit: asenat29
How Coaching Can Transform a Nonprofit
There was a really interesting interview last week in the Nonprofit Quarterly with Bill Ryan, author of Governance as Leadership, who recently led a study on coaching in the nonprofit sector. Coaching is a form of management consulting where a leader is given one-on-one strategic guidance.
An executive director can be coached to grow an organization, to build a stronger board, to revamp their financial model. Or as Ryan puts it, coaching answers the question: “If my organization wants to get to Point X, what do I, as a leader, need to do to build on my strengths and manage my weaknesses to help it get there?”
The concept of coaching is fascinating to me because, as Ryan points out, in corporate America coaching is much more commonplace than in the nonprofit world. If a CEO needs management counsel, they are encouraged to find a coach, whereas coaching for nonprofit leaders is often deemed a luxury. But, I think coaching is even more necessary in the nonprofit world. Nonprofit leaders, unlike their for-profit counterparts, often lack a management background having made their way to the top through program expertise.
The reality is that coaching for a nonprofit executive director can be absolutely transformative. It can make the difference between a program that is just getting by and a program that becomes financially sustainable and grows dramatically, with an engaged, committed board behind it.
Such is the case with ACE: A Community for Education, a nonprofit early childhood tutoring program. I have coached ACE Executive Director, Mary Ellen Isaacs for over a year since we completed an ambitious strategic planning process. They are now working to triple the number of students they serve and diversify and grow their financial model.
Here’s what Mary Ellen has to say about the coaching experience (or if you are reading this in an email click here to watch):
I believe coaching can be hugely transformative for nonprofit organizations, helping their leaders build the skills they need to grow their solutions far and wide. If you’d like to learn more about how I coach nonprofit leaders, check out the Coaching page of the website.
Photo Credit: wikimedia
Getting Real About Nonprofit Overhead Costs
There is something pretty interesting going on in Illinois around nonprofit overhead costs. I have written many times (here and here for example) about how the distinction between “overhead” and “program” costs in the nonprofit sector is meaningless at best, and destructive at worst.
I’m really excited to see that the Donors Forum in Illinois is starting to host real conversations between nonprofits and philanthropists about the Real Costs (including administrative costs) necessary to create effective social change.
With the help of the Bridgespan Group, in March the Donors Forum brought nonprofits and philanthropists together for a one-day discussion about real costs in the nonprofit sector. They want funders to understand that it is not enough to fund only nonprofit programs. In order to create effective social change, nonprofits must also be able to fund the infrastructure, staffing, space, tools, and research costs of their work.
The image above is a graphic facilitation of the March session. The Donors Forum has also developed a great website with resources for nonprofits and philanthropists about real costs, including Ann Goggins Gregory and Don Howard’s seminal article in the 2009 Stanford Social Innovation Review “The Nonprofit Starvation Cycle,” reports and resources about nonprofit fiscal fitness, Grantmakers for Effective Organization’s study on how philanthropy is changing, and much more.
As part of their efforts, the Donors Forum has also put together this video that helps to explain, in very clear terms, the critical importance of funding ALL of a nonprofit’s costs:
I’m excited to see where this conversation goes and whether more nonprofits and philanthropists start having open, honest conversations about what it really takes to create lasting social change. I’m hoping to interview Valerie Lies, President and CEO of the Donors Forum, later this year about this initiative and where they hope to go from here. So stay tuned.
Webinar: Getting Your Board to Raise Money
Ah, the nonprofit board of directors. That much disparaged group of volunteers who must often be begged, cajoled, or guilted into raising money for the nonprofit they serve.
But it doesn’t have to be that way.
If you can recruit the right people, get very specific about the skills they bring, and work with them to put their assets to use for your nonprofit, you can get even the most fundraising-shy board member to start bringing money in the door.
And this month’s Social Velocity webinar will show you how.
The Getting Your Board to Raise Money webinar will help you:
- Excite and engage the board in bringing money in the door
- Put every single board member to their highest and best use
- Set up a structure for effective board involvement in raising money
- Give you creative jobs for fundraising-shy board members
- Set up systems for tracking and rewarding board involvement
- Overcome board fear and inertia
This is one of our most popular webinars, and each time I’ve offered it, it sells out. Here’s what some past participants in this webinar had to say:
“This was one of the best and most helpful and informative webinars I’ve been on. It was exactly what I was looking for in terms of beginning to get our board energized and on track and I will use the slides
to help me prepare for our upcoming board retreat.”
“The webinar was very concrete and actionable – gave specific suggestions regarding
engaging board members. This was very useful. Well done.”
“This really opened my eyes to new possibilities – thank you so much!”
Financing Not Fundraising: Getting Your Board to Raise Money
Recorded
The registration fee will get you:
- A link to a recording of the webinar, which you can watch as many times as you like
- The PowerPoint slides from the webinar
- The ability to ask additional follow-up questions after the webinar
Download Now – $39
Photo Credit: buddawiggi
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