Real Innovation in Social Change Lies in Reinvention

I’m excited to announce that I have a new post up at the Chronicle of Philanthropy’s Mission:Innovation blog. It is reprinted below. The Chronicle’s Mission:Innovation blog is one of my favorites and was launched last year. Nicole Wallace, a senior writer at the Chronicle, manages the blog, which “reports on nonprofits that are taking bold, new approaches to the way they work, explores what charities can learn from other disciplines, and provides advice from experts on how organizations can better foster new ideas.”

I’m honored to contribute to the blog. Here is the article:

“Innovation” has become such a buzzword lately, particularly among people working on social change. But let’s take a step back and talk about what the word could really mean. Innovation is more than just new ideas. To me, it means taking a completely new approach to how we finance, structure, and prove social change.

The nonprofit world has never lacked new ideas to address problems. In fact, you could argue that nonprofits are innately entrepreneurial, being borne out of a recognized market failing and a new idea to remedy it.

The need, then, is not more new ideas. Rather, true innovation lies in reinventing a field built on social change.

Here are some ways that is starting to happen:

New support mechanisms. The avenues for sending money to social-change efforts are increasing significantly. What started 10 years ago with venture philanthropy has now expanded into nonprofit campaigns to raise growth capital, foundation loans and other investments in organizations, social-impact bonds, and investments that seek both financial and social returns. And that creates an opportunity for social-change efforts to be much more flexible and (we hope) successful, because access to enough and the right kind of money can often make or break a great idea.

A converging economy. We used to suffer from pretty strict delineations among the public (government), private (business), and nonprofit sectors, but that is changing. True innovation is happening where those lines blur—like businesses that make a profit solving social problems. Or governments developing new mechanisms to finance and evaluate nonprofit efforts, such as the Department of Justice’s Pay for Success program.

Proof of social change. Nonprofits used to be viewed as benevolent charities that received donations to support their good work. That’s not enough anymore. Nonprofit donors and social investors are increasingly demanding a social return on investment—proof that the organization is making a difference—in exchange for their money. And nonprofits are now competing not only with other nonprofits but also with for-profit social entrepreneurs. So nonprofits can no longer focus on how many children they’ve read to, meals they’ve served, or animals they’ve saved. They must track and prove how they have changed lives, changed systems, or changed communities.

Although these innovations are encouraging, there is room for so much more. What if:

• The best and the brightest of Generation Y worked to remake existing organizations from the inside out instead of just starting their own social-change groups?
• The social-capital market that’s emerging to provide financial vehicles for budding social businesses also included support for social entrepreneurs in the nonprofit world?
• Venture-philanthropy funds (growth capital for nonprofits) shared investor prospects with social-venture funds (growth capital for social businesses) and vice versa?
• All nonprofits interested in growth and with a proven model for success had access to enough capital and management expertise to expand?
• A nonprofit that solves social problems received as many resources and as much respect and attention as a business that solves a consumer need?

These things require sweeping, fundamental changes to the current structures of the nonprofit, government, and private sectors. To me, that’s real innovation.

Photo Credit: mademoiselle lavender

Tags: Chronicle of Philanthropy, Convergence, Mission:Innovation blog, Nicole Wallace, nonprofit outcomes, social entrepreneurs, Social Entrepreneurship, social impact bonds, social innovation, Venture Philanthropy

Why I Love Pinterest and Nonprofits Should Too

I am far from a social media expert, but I have grown to love some social media tools. Twitter, Facebook and LinkedIn have been my favorites, while I still haven’t seen the value of Google+ (although if someone wants to convince me, I’m all ears). But the newest social media darling, Pinterest is fast becoming my favorite. And I think it holds an enormous opportunity for nonprofits.

Pinterest is a social media network based on images. If you find a recipe, a blog post, a pair of pants, a livingroom set, you can “pin” it to a board and share it with your followers. Similarly, if you see something someone else has “pinned” you can “repin” it to your board. Picture an enormous blank wall with individual bulletin boards organized by your interests.

For example, I currently have 12 “boards”. Some are not work-related like “Home” and “Healthy Recipes.” But the rest are directly related to Social Velocity and my passion for social innovation and the nonprofit sector, like “Nonprofit/Social Change Books,” “Nonprofit Campaigns,” “Cool Infographics,” and “Nonprofit Media.” That last board is actually a shared board among 40+ people and organizations where we can all add to and edit the board.

There are several things about Pinterest that I love. For fun last Saturday night I spent a couple of hours there just scanning and pinning (sad, huh?).

There have been many articles about the potential of Pinterest for companies. People can pin images of particular products and encourage their friends and followers to purchase. What a boon to business!

But I think Pinterest is a particularly powerful opportunity for nonprofits for several reasons:

• Nonprofits are naturally image-based. The every day work that nonprofits are involved in lends itself to compelling images: a child laughing while reading a good book, a hug from a case worker to their client, a new home, a beautiful piece of land conserved, an endangered animal. Include a compelling picture in every story you create about your nonprofit and pin it on Pinterest. You can also pin images from other places that relate to your passion and your mission.




• Nonprofits easily connect to passion. I don’t care how much you love that new vacuum cleaner, you cannot be as passionate about it as you are about the child you are tutoring. People launch nonprofits or donate to nonprofits because an issue really hits them at the core. They may have had a loved one die of a terrible disease, or they may absolutely love border collies. What the social change sector has in spades is passion. Pinterest is a natural place to share that passion and convince others of its worth.




• Female donors are a large and growing force. If you want to attract more of this increasingly influential philanthropic force you better find them where they are, and right now that’s Pinterest. 68% of Pinterest users are female. And they spend a lot of time there. You want to be part of that.




• Nonprofits are all about good story-telling. Pinterest is a natural place for storytelling. The Chronicle of Philanthropy has put together a great gallery of ways nonprofits tell their stories through data visualizations. Although the gallery isn’t on Pinterest, all of these images should be and probably will be soon. Images tell such a better story than words, and nonprofits have so many great stories to tell. Use Pinterest to do it.

If you want a quick guide to getting started on Pinterest, check out this great HubSpot post, although it’s focused on businesses, it definitely applies to nonprofits.

Get out there and give Pinterest a try. I think you’ll like it.

Photo Credit: Mashable

Tags: female donors, infographics, nonprofit social media, nonprofit storytelling, Pinterest, social media

Upcoming Financing not Fundraising Webinar: Creating a Message of Impact

In order for nonprofits to start effectively financing their efforts, they must get prospective donors excited about their impact. Creating a message of impact is the only way to engage and invest people in the work you do. The next webinar in the Financing Not Fundraising webinar series will help your nonprofit create a message of impact.

Our Financing Not Fundraising webinar series has been very popular. Comments from past webinar participants include:

“This webinar was more useful than whole three-day conferences that my nonprofit has sent me to.”

“I loved the reframing of financing for desired results instead of funding for operations…your message to wed money to the mission was a big AHA moment – and am now figuring out how to bring this to life for staff and board.”

“Social Velocity conceptually is way ahead of the curve in nonprofit consulting. Visionary and spot-on!”

The next webinar in the series, Creating a Message of Impact, will help your nonprofit have a more compelling conversation with potential donors. No one likes to beg for money. And donors increasingly aren’t moved to respond to the “tin cup” approach. A far more effective way to communicate with potential donors is to talk about the change your nonprofit is creating in the community.

Donors invest in nonprofits that share their values and are creating change to things the donor really cares about. So in order to attract those donors, nonprofits need to understand and articulate the change they are creating in the community. They need to create a Message of Impact.

This webinar will help your nonprofit:

• Move from begging to investing
• Create a compelling case for support
• Target donors who care about your work
• Get your board excited about asking for money
• Differentiate between donations and investments
• Talk about the work your nonprofit does in the community
• Articulate a social return on investment (SROI) for donors

The registration fee will get you:

• Access to the live, interactive webinar
• 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 follow-up questions after the webinar

I hope to see you there!

Financing Not Fundraising: Creating a Message of Impact – Live Webinar
Tuesday, March 27, 2012
12 noon – 1:00pm Eastern

Tags: community change, financing not fundraising, impact messaging, nonprofit fundraising, nonprofit impact, social return on investment, theory of change

Technology for Good: An Interview with Craig Newmark

In this month’s Social Velocity blog interview, we’re talking with Craig Newmark, the founder of craigslist, the web-based platform that has fundamentally changed classified advertising. In early 2011, Craig launched craigconnects, his initiative to link everyone on the planet using the Internet in order to bear witness to good efforts and encourage the same behavior in others.

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

Nell: You seem to be a different breed from other high-tech philanthropists. What is your philosophy about philanthropy? For you, what’s the best way to do it?

Craig: I’m a nerd, and can be somewhat simplistic. If there’s some area where I can help, I should to that. My broad theme is “technology for good”, where people work together using social media for the common good. So, I proceed on that basis, finding groups who are good at something, usually using tech, at least using social media for outreach, fundraising and more.

Nell: Why is Craigslist Foundation winding down? How and why did you come to that decision?

Craig: I’m not really a part of CLF, and I think the consensus was that it had run its course, and had accomplished a lot.

Nell: With Likeminded and craigconnects you obviously have an interest in making the social sector more transparent and integrated. Do you think that is happening? Are those working on social change (nonprofits, foundations, social entrepreneurs, social investors) getting better at sharing information and what will encourage that?

Craig: I feel that people in the social sector are starting to work together in more and better ways, but it requires folks like me to nudge them together. In particular, I’m chatting with nonprofits about promoting each other in social media, with little success so far.

Nell: A big part of craigconnects is to get nonprofits to collaborate more effectively. Collaboration is often a tricky concept in a sector where the reality of scarce resources breeds constant competition. How do you reconcile collaboration and competition in the space?

Craig: I don’t know yet, but will figure it out, with lots of help.

Nell: Part of the craigconnects model is that you vet the nonprofits that you showcase there based on ratings services like CharityNavigator and GuideStar, so what do you make of recent efforts to move nonprofit ratings systems to outcomes as opposed to use of funds? What are your thoughts on how we create meaningful ways to evaluate nonprofits?

Craig: I think that real measures of nonprofits will involve their effectiveness, but the means of doing so are still under development. Charity Navigator, GuideStar and GreatNonprofits are making real progress.

Tags: CharityNavigator, Craig Newmark, craigconnects, craigslist, craigslist foundation, GreatNonprofits, GuideStar, high tech philanthropy, Likeminded, Philanthropy, social entrepreneurs, social media

10 Great Social Innovation Reads: February 2012

February was the month to learn from other’s mistakes — from Komen to Hull House there was some great analysis about what went wrong and what can be learned. The other thing emerging in February was new social media darling, Pinterest, as an opportunity for nonprofits to tell their story visually.

Below are my ten picks of the best reads in social innovation in February, 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.

1. The biggest news in February was Susan G. Komen Foundation’s repeated strategy and PR blunders when they pulled funding from Planned Parenthood, then reinstated the funding. Kivi Leroux Miller offered tips to recover from a PR scandal. Nancy Schwartz broke down Komen’s “busted nonprofit brand” and Beth Kanter described the 5 stages of a social media PR disaster.  And when things finally settled down a bit, Komen stumbled again with their attempt to reassure donors.




2. Always a great resource, the Nonprofit Tech 2.0 blog provides 50 Fun, Useful, and Totally Random Resources for Nonprofits




3. “As modern businesses search for a soul, who better than Millenials to help find one?” This month there were two articles about how the Millennial generation approaches work and ultimately how it will change how we all work: 13 Ways The Recession Has Changed How Millennials View Work and The Crisis of Meaning in the Millennial Workforce.




4. Tom Watson launched a new column in Forbes focused on social entrepreneurship, and his inaugural post took an interesting spin on the endless “what is social entrepreneurship” conversation by finding parallels between Steve Jobs and Occupy Wall Street.




5. Sometimes Dan Pallotta gets it really right, and that is especially true with his post arguing that a huge missed opportunity for philanthropist is to invest in the fundraising capacity of nonprofits.




6. In the Harvard Business Review blog Nilofer Merchant argued that technology is fundamentally changing how organizations operate. This applies to nonprofits as well, and we should all take note.




7. If you, like most people, struggle with creating content for your blog, this infographic makes it so much easier.




8. Writing in the Washington Post, Antony Bugg-Levine, head of the Nonprofit Finance Fund, argued that nonprofits must embrace breakthrough innovations like restructuring their approaches to social problems and using capital to build organizations, “The sooner we confront our new economic reality and support visionary thinking and organizations, the sooner we can begin to rebuild a sustainable safety net.”




9. The collapse of one of America’s oldest and most successful nonprofit organizations late last year, Hull House, provides a cautionary tale to other nonprofits that may not be employing good financial management, argued Rick Moyers.




10. An interesting debate loomed at the end of the month because of a study by the Center for Philanthropy at Indiana University that found nonprofit managers lack key financial knowledge. But Kate Barr and Ruth McCambridge took issue with the study’s methods arguing that the study missed the mark.

Photo Credit: aithom2

Tags: Antony Bugg-Levine, Dan Pallotta, Fundraising, Hull House, nonprofit financial management, nonprofit social media, nonprofits and Pinterest, Occupy Wall Street, Social Entrepreneurship, Steve Jobs, Susan G. Komen Foundation

How Nonprofits Can Thrive While Awaiting Economic Recovery

After 3+ years of a difficult recession it looks like the economy might be starting to turn around. That’s great news. But for the nonprofit sector, which is always the first hit by and last to rebound from a recession, it might still be awhile until they enjoy the looming economic recovery. But it does no good for nonprofit leaders to throw up their hands and curse the economy. Instead, nonprofits should seize this opportunity to rethink how their organization brings money in the door.

There are some key things nonprofit leaders can do to create a sustainable financial model in the midst of lingering economic uncertainty:

• Take a Step Back. Stop putting your organization in the “fundraising” box and take a big step back. Figure out an overall financial model for your organization that connects with your mission and your organization’s core competencies. Don’t just go through the regular fundraising motions (direct mail, events, grants). Rather, analyze how to create a long-term financial model for your organization.
  




• Harness Your Board. Your board of directors ideally is a group of people who bring connections and expertise that could help your organization. Tap into that. Educate them on what your organization needs and brainstorm how they can help. Now is not the time to be shy. Be strategic about what your board can do and get them to do it.




• Create a Plan. If your organization doesn’t have a strategic plan and a revenue plan, create them. You raise money by being strategic, first about what your organization is and does, and second about how you are going to create sustainable revenue streams. People give to causes that they care about, and they give even more money to organizations that are strategic about what they do and how. A good strategic plan is an invaluable tool around which you can build investment. And a good revenue plan gives you a step-by-step way to generate money.




• Reallocate Resources. As a nonprofit organization you have limited resources (money, staff, technology, time) with which to raise money. You want to make sure that the effort you put in has the highest return on investment. Calculate the direct and indirect costs of every revenue-generating activity and determine the real net income you generated. Are there better, more effective ways to raise more money for less cost and effort?




• Use Technology. Move your communications with donors and prospects online. You’ll save money and have a better chance of getting more and bigger gifts. Send email newsletters, campaigns, event invites. Survey your donors. Create an online community through social media where people can get to know your organization and become involved. People will become more interested in your work and more invested in the organization.




• Learn from the Best. Now is the time to learn from others, get a fresh perspective, find a mentor or coach for your Development Director. Use social media to find interesting and innovative people and ideas. Talk with your fellow social change leaders locally, nationally and internationally. Attend online conferences and webinars. By getting out and hearing what others have done and how they have innovated you will find new ways to grow revenue.




• Strengthen Your Case. Money is raised around a case for support. It can be tempting when times are tough to fall back on a message of need. “We need to raise $50,000.” But the better way is to clearly connect donors with the change you are creating in the community. If you don’t have a case for support write one. If you have one, revisit it and make sure that it is compelling, clear, concise, inspiring. Invest donors in the change you are creating.




• Clone Your Best Donors. When you are struggling to find new donors, go back to the source. Dig into your database to determine the characteristics (demographics and psychographics) of your best (most years of giving, biggest dollar, greatest upgrade) donors. Then survey them (formally or informally) to find out why they give, what messages resonate with them, what they read, where they get their information. You want to understand how they tick so that you can find others like them.




• Diversify Your Funds. When one revenue stream (or several) are down, you want to be able to draw on other streams. Are there other revenue streams you could launch or strengthen? Have you explored earned income? Could you grow your individual donor base? There are many ways to raise money and always potential for new avenues. Explore whether some of these make sense for your organization.

Things may be looking up, but it’s going to be awhile for the nonprofit sector. Instead of waiting around for a better economy, make some significant changes now to how you raise money. In so doing you’ll be turning this challenge into a tremendous opportunity for your organization.

Tags: case for support, cost of fundraising, fundraiser, nonprofit board of directors, nonprofit donors, nonprofit earned income, nonprofit fundraising, nonprofit fundraising events, nonprofit social media, nonprofit strategic plan

Could Philanthropic Equity Revolutionize the Nonprofit Sector?

Today I guest blogged on the About.com Nonprofit Charitable Orgs blog, at the request of the blog’s author, Joanne Fritz. The topic is one that is near and dear to my heart, philanthropic equity. “Philanthropic equity” is just a fancy term for the kind of money the nonprofit sector so desperately needs and every nonprofit leader should understand. Below is an excerpt from the post, but you can read the whole post here:

There is a fairly new concept in the nonprofit world that has the power to completely transform the sector. “Philanthropic equity” (or “growth capital”) is just a fancy term for the money many nonprofit organizations desperately need.

Philanthropic equity is a one-time infusion of significant money that can be used to strengthen or grow a nonprofit organization. It can be money that grows a successful program to other clients, other cities, other regions. Or it can be money that strengthens the organization and makes it more sustainable.

But before you can understand philanthropic equity properly, you must understand a critical distinction about money. There are two kinds of money, revenue and capital…

You can read the entire post on the About.com Nonprofit Charitable Orgs blog here.

Photo Credit: Glyn Lowe Photos

Tags: building nonprofits, Fundraising, nonprofit capacity, nonprofit capacity capital, nonprofit growth capital, philanthropic equity

How to Find Individual Donors

When I speak to groups of nonprofit boards and staff, they are often shocked when I reveal how money flows to the nonprofit sector. Thinking that foundation grants are the holy grail of funding, many nonprofits hire a grant writer and spend countless hours and resources chasing highly competitive grants. But the fact is that barely 2% of the money flowing to the nonprofit sector comes from foundations. A much larger portion, over 11%, comes from individuals:

But many nonprofits don’t know how to raise money from individuals. For them, it seems somehow easier to research foundation guidelines, put together a proposal that answers each question, and hope for the best. But individual donor fundraising can help diversify a nonprofit’s funding picture, and major donor fundraising in particular, which requires a one-on-one relationship building mode,l can be a great way to systematically expand a nonprofit’s network and funding. It is also the highest and best use of a board member’s fundraising time.

To help nonprofits understand individual donor fundraising and how to get moving in that direction, the next webinar in our ongoing Financing Not Fundraising webinar series focuses on how to bring individual donors in the door.

The Finding Individual Donors webinar will give you tools and strategies to:

• Understand the differences between smaller donor fundraising and major donor fundraising
• Define a major gift for your organization
• Use social media to connect with individual supporters
• Create events that resonate with individual donors
• Identify prospects
• Engage your board in individual donor fundraising
• Create a system for engaging individual donors
• Launch a major donor campaign
• Break an individual donor dollar goal into pieces to make the goal achievable

And much more.

If you want to attract individual contributors to your nonprofit, but don’t know how to get started, or if you would like to expand the individual donors you already have, this webinar will show you how.

Webinar Details:
Financing Not Fundraising: Finding Individual Donors
Wednesday, February 22, 2012
12 noon-1:00pm Eastern
Price: $40

I hope to see you there!

Tags: financing not fundraising, finding individual donors, fundraising from individuals, individual donor fundraising, nonprofit webinars, raising money from individuals