In addition to the Social Impact Exchange conference I mentioned earlier, I will be traveling a lot this summer connecting with nonprofit and philanthropic leaders. I’ll be blogging about what I learn in my travels and conversations. And, I’m really excited to announce, that I have an amazing group of guest bloggers who will be posting throughout the summer as well.
These guest bloggers are people who really make me think and will offer some really interesting perspectives. I’ve invited them each to take over one Social Velocity blog post sometime during the summer.
Below is the guest blogger lineup with some background on each of them. Their posts will begin in late June. And I will continue to post throughout the summer as well.
Social Velocity Summer Guest Bloggers
Robert is the founder of DC Central Kitchen and LA Kitchen, as well as the nonprofit sector advocacy group, CForward. Robert was included in the Non Profit Times list of the “50 Most Powerful and Influential” nonprofit leaders from 2006-2009, and speaks throughout the country and internationally on the subjects of hunger, sustainability, nonprofit political engagement and social enterprise. He is a tireless advocate for the nonprofit sector, encouraging nonprofits to take their rightful seat at the table. He is always pushing us to think bigger and smarter about social change. You can read my past interview with him here and my post about CForward here.
David is the founder of Idealistics, a former social sector consulting firm that helped organizations increase outcomes, demonstrate results, and organize information. He has worked in the social sector for the last decade providing direct services to low-income and unhoused adults and families, operating a non-profit organization, and consulting with various social sector organizations and foundations. David’s professional focus is on improving the way social sector organizations use information to address poverty. He writes his own blog, Full Contact Philanthropy, which I highly recommend. He will make your head hurt, but in a really good way. You can read my interview with him here and watch the Google Hangout he and I did about Using Real Performance Data to Raise Money.
Jessamyn is Executive Director of the Peery Foundation, a family foundation based in Palo Alto, California. The Peery Foundation invests in and serves social entrepreneurs and leading organizations in the San Francisco Bay Area and around the world. Jessamyn helps shape the foundation’s strategy, develops programs, strengthens the foundation’s portfolio, and supports existing grantees. Her experience as part of the founding Ashoka U team has given her the perspective and skill-set to help the foundation develop new methods to support and build the field of social entrepreneurship. You can read my interview with her here.
Adin is Senior Director of Community Impact and Innovations at the Jewish Community Federation and Endowment Fund. In this role, he develops new strategies and programs to bring about change and impact within JCF’s mission. Adin focuses on defining metrics to document impact, maximizing measurable impact and increasing the visibility of the organization. Prior to JCF, Adin was a nonprofit consultant and had his own blog, Working in White Space, which was phenomenal. You can read my past interview with him here.
Laura is a network developer at the Council on Foundations, where she tracks philanthropic trends and builds relationships with leaders advancing the common good across sectors. She also leads an impact investing initiative and regularly interacts with those interested in the changing landscape of social good. Previously as manager of public-philanthropic partnerships, she built the capacities of federal agencies interested in partnering with foundations. Before joining the Council, she worked at Grantmakers for Effective Organizations and at the Central New York Community Foundation. Laura has been named a Global Shaper by the World Economic Forum. She is also a StartingBloc Fellow and writes for UnSectored, serving on advisory boards for both organizations. You can read my interview with her here.
So there you have it. A summer guest blogging lineup that I am thrilled about. I can’t wait to read what they all have to say. Stay tuned!
Photo Credit: Holger.Ellgaard
Crowdfunding is quickly becoming the new shiny object in the world of social change. From Giving Days, to new giving platforms, to lots of articles and studies (here and here to start), it seems that crowdfunding is everywhere lately.
I’m all for innovations in the funding of social change, but I’m not convinced that crowdfunding is really creating anything fundamentally new.
Under “crowdfunding” I include efforts like Kickstarter where a creative effort (a film, art exhibit, library) can garner small investments from a large number of people. And I’m also including Giving Days, at the city and national level, where nonprofits try to raise as much money as possible in a 24-hour online “event”. What these efforts all have in common is they raise money, from a large group of people, over a short period of time.
I earned my fundraising chops working public television pledge drives, one of the earliest “crowdfunding” efforts. The technology was different (TV screens and telephones, instead of CRM systems and social media), but I’m not sure much else is.
So I would like to see us separate what is potentially exciting about crowdfunding from what is just hype. To help in that effort, I offer some questions:
How much is truly new money?
It’s unclear to me how much new money crowdfunding brings to social change organizations. For example, nonprofits participating in Giving Days encourage their annual donors to give on that specific day so that Giving Day dollars are higher. But that’s not new money. True innovation in social change funding comes from efforts to grow the 2% pie - giving as a share of America’s Gross Domestic Product has stayed at 2% for the last 40+ years. I’m not convinced that crowdfunding uncovers money that would not have otherwise ended up somewhere in the nonprofit sector.
How many new donors are being retained?
The point of crowdfunding is that it’s a one time deal. There is a message of urgency that encourages donors to give NOW. So the numbers on a specific Giving Day or with a crowdfunding campaign may be good, but is the funding sustainable? Are nonprofits or social change organizations actually growing their donor base? Are they able to go back to these investors later and encourage them to give again? And if the funding isn’t sustainable, is it really worth the effort it took to get it?
Is crowdfunding reinforcing the “Overhead Myth”?
The destructive idea that donors shouldn’t support nonprofit “overhead“, or administrative costs, is slowly dying, but crowdfunding might just be bringing it back to life. Nonprofit crowdfunding darling charity:water has been taken to task for reinforcing the idea that 100% of the dollars they raise go “directly to the field”. And crowdfunding projects are often specific and “sexy,” which means that the money is not being raised for boring things like the staffing, technology, and infrastructure that most organizations desperately need. Are we perpetuating the overhead myth by encouraging donors to give to specific projects, instead of to overall issues, organizations or teams?
What’s the return on investment?
A lot of time and effort can go into crowdfunding campaigns. If the benefits are shortlived, donors aren’t retained, and the majority of the funding is not new dollars, while the costs (staff and board time, technology investments) are high, then what is the true return on investment? I’m not arguing that it can’t be positive, but I would like to see more critical analysis about it, both at the aggregate and the individual organization levels.
I hate to be a Debbie Downer, but I’d like us to dig a bit deeper to understand what the real effects of crowdfunding are so far and what it’s true promise is. If there is already research out there that can answer some of these questions, please let me know in the comments below.
Photo Credit: SeedingFactory.com
Bradach asked leaders and thinkers in the scale movement – like Risa Lavizzo-Mourey from the Robert Wood Johnson Foundation, Billy Shore from Share Our Strength, Wendy Kopp from Teach for All, and Nancy Lublin from Do Something – to contribute their insights to the series. Bradach is doing this because he believes we have not yet figured out how to grow solutions to a point at which they are actually solving problems. As he wrote in his kick-off post to the series:
Over the past couple of decades, leaders have developed a growing catalog of programs and practices that have real evidence of effectiveness. And they’ve demonstrated the ability to successfully replicate these to multiple cities, states, even nations in some cases, reaching thousands or even millions of those in need. Despite all this progress, today even the most impressive programs and field-based practices rarely reach more than a tiny fraction of the population in need. So we find ourselves at a crossroads. We have seen a burst of program innovation over the past two decades; we now need an equivalent burst of innovation in strategies for scaling.
One of the places where scale has been an on-going topic of conversation is the annual Social Impact Exchange’s Conference on Scaling Impact. Now in its fifth year, this conference next month in New York City brings together “funders, advisors and leaders to share knowledge, learn about co-funding opportunities and develop a community to help scale top initiatives and build the field.” The conference is organized, in part, by the Growth Philanthropy Network, which “is creating a philanthropic capital marketplace that provides funding and management assistance to help exceptional nonprofits scale-up regionally and nationally.”
I’m excited to be attending this year’s conference and participating in a panel called “Business Models for Sustainability at Scale.” From my perspective, one of the biggest hurdles to scale is a financial one. Very few nonprofits have yet figured out how to create a sustainable financial model, let alone how to create one at scale. And this hurdle exists for many reasons, including: lack of sufficient capital in the sector, lack of sufficient management and financial acumen among nonprofit leaders, an unwillingness among funders to recognize the full costs of operation. So I’m excited to be part of this important conversation about how we can actually create financially sustainable scale.
It will be interesting to see how the conversations at the Scaling Impact conference – led by rockstars in the field like Antony Bugg-Levine from the Nonprofit Finance Fund; Tonya Allen from the Skillman Foundation; Heather McLeod Grant, author of Forces for Good; Paul Carttar from The Bridgespan Group; and Amy Celep from Community Wealth Partners – will relate to the perspectives of those writing in the “Transformative Scale” blog series. I wonder where there will be overlap and where there will be disagreement or even controversy. Scale is an incredibly difficult nut to crack. And as Bradach rightly states, no one has figured it out yet.
I will be posting to the blog during the conference about what I’m hearing and where there are common threads or separate camps.
I hope to see you there!
Image Credit: Social Impact Exchange
Americans are increasingly fascinated with the Millennial generation (those born between 1981 and 2000), largely because they are the biggest population cohort the U.S. has ever seen. Whatever they do is sure to have a big impact. I’ve been particularly interested in how they might affect how money flows to social change.
But now I wonder how they might impact the social change workforce.
There was a really interesting article recently about how Millennials are ditching traditional careers in favor of more creative, meaningful work:
A growing number of Americans are abandoning traditional jobs for work that is more hands-on and that they deem more meaningful. For some, it is out of necessity…many people, faced with diminishing corporate opportunities, have been forced into thinking like entrepreneurs. For many, it is a choice. Old-school artisanship—like craft brewing and shoemaking and the millinery arts—is on the rise. A nation of hobbyists and fine artists have brought energy and invention to (and made more than a few bucks on) websites like Etsy and Big Cartel. There’s a sprouting up of first-generation farmers. These days, it would not be odd to see a hedge-fund manager throw it all away to become a mushroom grower. Or a Google gearhead to take up textiles. Call it the New American Dream, where uncertainty is being spun into infinite possibilities, and a pathway to unexpected freedom and deep satisfaction feels like our birthright.
Their staggering unemployment, deepening distrust of corporate America, and civic-minded perspective (the most since the Greatest generation), have all combined to make the Millennial generation crave a creative, flexible and meaningful work life.
And that could be a boon to the nonprofit sector.
I wonder if over the next couple of decades, as Millennials take center stage in the workforce, we will witness people increasingly chucking the corporate ladder for something more meaningful and flexible.
Certainly many Millennials have already, and will continue to, flock to the emerging world of social entrepreneurship, which neatly combines their love of the entrepreneurial with their drive for social change, but not all Millennials can or will want to start their own thing. For the rest of them, I wonder if nonprofit organizations might attract their interest.
For so long nonprofits have struggled to attract and retain talent because of less competitive salaries and packages than their corporate counterparts. But perhaps those benefits are increasingly less appealing to the future workforce.
Now, what nonprofits have in spades – entrepreneurial approach, flexibility, social change – could actually become a competitive advantage. What if the nonprofits of the future become the sought after refuge of creative Millennials ready to make social change, not necessarily on their own, but as part of something bigger?
Definitely an interesting trend to watch.
Image Credit: onlinempadegrees.com
I recently finished the most amazing book. It wasn’t about nonprofit management, or social entrepreneurship, or leadership, or any of the other topics I usually write about here. But I think it is still quite relevant.
I read Wonder by R.J. Palacio at the repeated urging of my 9-year old son who read it voraciously over a couple of days and was desperate to discuss it. Wonder is a young adult novel about an amazing 5th grade boy named Auggie who was born with countless physical challenges but also a deep wisdom and uncanny ability to change the people around him for the better.
While the book is about Auggie’s more difficult than usual transition into the highly charged world of emerging adolescence, it is also, and more importantly, about what makes humans both incredibly imperfect and deeply beautiful.
The book takes place over Auggie’s 5th grade school year when he enters a private school that first struggles to accept him but later fully recognizes his gifts. Along the way we learn a lot about human nature, it’s depths of cruelty and divisiveness, but also it’s soaring ability to change and to love.
What moved me most about this book was the 5th grade graduation speech by the school principal, Mr. Tushman. In looking back over the last year of Auggie’s remarkable presence in his school, Mr. Tushman finds there the opportunity that we all have as humans to be “kinder than necessary.” He helps his audience, and all those who read Wonder, realize that as humans we hold in our hands – in every choice, in every action – the possibility for tremendous good:
In The Little White Bird [J.M. Barrie] writes, ‘Shall we make a new rule of life…always to try to be a little kinder than is necessary?’ Here Mr. Tushman looked up at the audience. “Kinder than is necessary,” he repeated. “What a marvelous line, isn’t it? Kinder than is necessary. Because it’s not enough to be kind. One should be kinder than needed…We carry with us, as human beings, not just the capacity to be kind but the very choice of kindness…Children, what I want to impart to you today is an understanding of the value of that simple thing called kindness…In the future you make for yourselves, anything is possible. If every single person in this room made it a rule that wherever you are, whenever you can, you will try to act a little kinder than is necessary…And if you do this, if you act just a little kinder than is necessary, someone else, somewhere, someday, may recognize in you, in every single one of you, the face of God.”
And it occurs to me that in the work of social change, we as social entrepreneurs are making a conscious choice to be kinder than is necessary. We are choosing to go against the status quo of growing poverty, crumbling educational and political institutions, climate change. We are choosing a different, harder, but better path.
So when the news of the day, or the many problems of the world get me down, I think back to Mr. Tushman’s speech. I think about the power that we all, as single individuals, have to make this world a kinder, better place. And I think of the many social change leaders across the country, across the world who are choosing every day to be kinder than is necessary. And that makes me smile.
A couple of years ago I recognized that there was a real need in the nonprofit sector for tools to help nonprofit staffs, board members and donors make their organizations more strategic and sustainable.
So I began developing e-books, guides and webinars to explain new concepts (like Financing Not Fundraising), demonstrate how to use new models (like a theory of change) and guide nonprofit leaders to a better way (like better engaging their board).
Today, I am really excited to announce, as promised, the launch of the expanded and streamlined Tools store at Social Velocity.
I have spent the last several months revising and expanding many of the e-books, step-by-step guides and on-demand webinars available for download at the Social Velocity Tools page. And we’ve completely revamped the shopping cart experience to make it easier to find the tools you need and to offer additional payment options.
There are four categories of Tools available to you.
- On-Demand Webinars
These can be viewed whenever and however many times you’d like. Some of the webinar topics include:
- Step-by-Step Guides
These take a complex concept (like a theory of change) and show you step-by-step how to create one for your organization and how to use it to garner more support, chart a strategic direction, and much more. Some of the Step-by-Step Guides include:
These explain new approaches, the theory behind them, and how to start implementing a changed approach in your nonprofit. Like the:
- Tool Bundles
I’m most excited about these bundles where I’ve grouped e-books, webinars and guides around a particular goal a nonprofit leader wants to achieve, saving you 15% off the individual tool prices. For example:
But there are many more e-books, guides, webinars, and bundles available on the Tools page, so I invite you to check it out.
I hope these Tools are helpful to you as you work to move your nonprofit forward. Please let me know if you have questions as you explore.
And as always, please let me know what other tools would be helpful to you.
Today is Halloween, which, in my world, means that beyond candy, and trick or treating, and pumpkins it’s time for my annual “Monster List of Resources.” A few years ago I started the tradition of offering a list of resources for nonprofit leaders on Halloween (you can see past lists here and here). Each list is culled from the much larger, constantly evolving list of conferences, organizations, articles, books, blogs, and reports on the Social Velocity Resources Page.
This year I want to focus on the ever-growing number of conferences in the social innovation space. I’m really excited by how many really interesting gatherings are occurring.
But what did I miss? Please add to the list in the comments below. And don’t forget to check out (and add to) the much larger list of resources here.
Social Innovation Conferences
- After the Leap
- Center for Effective Philanthropy Conference
- CityWorks (X)po
- Clinton Global Initiative
- Global Social Venture Competition
- Grantmakers for Effective Organizations Conference
- Harvard Social Enterprise Conference
- Impact Conference
- Investors’ Circle
- Millennial Impact Conference
- National Innovation Summit for Arts and Culture
- Net Impact Conference
- NextGen: Charity
- The Nonprofit Management Institute
- Nonprofit Technology Conference
- NYU Social Innovation Symposium
- Opportunity Collaboration
- Skoll World Forum on Social Entrepreneurship
- Slow Money
- Social Capital Markets Conference
- Social Enterprise Summit
- Social Good Summit
- Social Impact Exchange
- Social Innovation Summit
- Social Venture Partners
- The Feast
- Yale Philanthropy Conference
Photo Credit: Wikipedia
In today’s Social Velocity interview, I’m talking with Ted Levinson. Ted is the Director of Lending at RSF Social Finance, a San Francisco-based financial services non-profit dedicated to transforming the way the world works with money. Levinson manages RSF’s flagship $75 million Social Investment Fund which provides debt capital to US and Canadian social enterprises.
You can read past interviews in the Social Innovation Interview Series here.
Nell: RSF Social Finance is really the leader in the social finance market, you’ve been doing this long before anyone started talking about a “social capital marketplace.” Given that long history, how do you view the current state of the social capital market? Are we where we need to be to funnel enough and the right kinds of capital to social change efforts? And if not, how do we get there?
Ted: RSF has a twenty-nine year operating history, but it’s still early days for the field of social finance. The industry is at the same stage of development as natural food stores were thirty years ago – we’re established, we’re growing, we’re doing good work, and yet we’re still considered a fringe movement. I believe we are on the cusp of mainstream acceptance which will mean a much broader audience of impact investors (especially young people and unaccredited investors) and far greater demand for social capital from the growing number of social enterprises that are just now becoming investment-ready.
There’s been a shift in society’s view of natural food stores – we’ve overcome our fear of the bulk bins and now all grocery stores look more like natural food stores. I expect the same thing to happen with our conventional financial institutions which are just now beginning to pay attention to social finance.
What the field really needs is to expand the financial products available to social enterprises and address some of the existing gaps. Frustrated social entrepreneurs may disagree, but I think the angel capital and large-scale venture capital spaces are meeting the needs of for-profits. Incubators, business plan competitions and seed funds are providing modest amounts of funding to emerging non-profits and for-profits. RSF and some of our friends including Nonprofit Finance Fund, Calvert and New Resource Bank are addressing the middle market market.
The big voids in social finance include:
- True “risk capital” for non-profit social enterprises. We need more foundations willing to place bets on high-potential organizations.
- Bigger finance players or (better yet) a more robust consortium of social finance organizations that can band together to meet the $5 million + needs of high growth social enterprises such as Evergreen Lodge, Playworks and other organizations that are reaching scale.
I believe the field will get there but we’re playing “catch-up” now and social entrepreneurs are an impatient bunch.
Nell: RSF does something pretty revolutionary in that you combine philanthropic giving with impact investing, whereas these two sides of the social capital marketplace have not yet really found a way to work together in any large scale or significant way. Why do you think that is? And what needs to change in order to encourage foundations and impact investors to work more closely together?
Ted: We call our approach of combining debt and philanthropic dollars “integrated capital,” and we think it’s going to have a profound effect on impact investors, philanthropists and the social enterprises it serves.
Most non-profit social enterprises rely on a combination of earned revenue and gift money. There’s no reason why a single transaction can’t bridge these two forms of capital. With integrated capital we can leverage philanthropic grants or loan guarantees to push high-impact loan prospects from the “just barely declined” category into the “approved” category. In fact, even some for-profit social enterprises are eligible for this. Our loan to EcoScraps – a fast-growing, national, composting business was made possible by a foundation that shared in some of RSF’s risk.
Integrated capital is possible because RSF works with individuals and foundations that have overcome the prevailing view that how you invest your money and how you give are distinct activities. We’re also fortunate to work with an enlightened bunch of people who recognize that philanthropic support for social enterprises isn’t a crutch or a sign of a failed enterprise.
Our work at RSF is driven by a belief that money ought to serve the highest intentions of the human spirit. Conscientiously investing money, giving money and spending money can all further this goal.
Nell: What do you make of the emerging social impact bond movement? Is this a social finance vehicle that you think will work?
Ted: I’m deeply hopeful and deeply skeptical of the future of social impact bonds. I’m hopeful because our government is notoriously risk-adverse and slow to adopt new ways of improving education, reducing recidivism, or curbing our runaway health care costs. I think spending money on early interventions could go a long ways towards improving these fields societal challenges, but paying now to save in the future is at loggerheads with the short-term view which prevails in politics. Social impact bonds are a clever way to push the risk on to investors who are willing to take a longer view for the potential of a big upside.
I’m also a fan because social impact bonds are an alternative to the financial engineering which brought us collateralized debt obligations. They demonstrate that Wall Street doesn’t have a monopoly on financial innovation.
That being said, I’m skeptical that this market can ever reach a stage where transactions costs can drop enough to make it economically viable. Bringing together the multiple parties that are required for such a transaction (the government, the investor, the non-profit, a monitoring entity, a social finance organization, an attorney and possibly a foundation) just seems unaffordable to me.
Nell: What sets the nonprofits and social enterprises you invest in apart? What characteristics do you look for in the investments you make?
Ted: All of our borrowers fall into one or more of three focus areas – sustainable food systems, the environment and education & the arts. These borrowers all have capable, committed management who recognize that financial sustainability is a prerequisite for lasting change. Our best borrowers have strong communities supporting them whether it is donors, customers or suppliers.
Evaluating these stakeholders is a key component of our underwriting process at RSF.
Our experience demonstrates that performance improves when social enterprises engage all of their stakeholders. RSF’s long-standing support of fair trade is an example of this commitment. We also regularly expect borrowers to solicit their community members to join RSF’s investor community as a precondition to approval. We take community seriously at RSF!
Our borrowers are all addressing major social or environmental problems such as a lack of adequate housing for developmentally disabled adults (Foundation for the Challenged), inefficiencies in the wind industry (FrontierPro) and poverty and environmental degradation from rice farming (Lotus Foods.) As social enterprises, they’re primary activities are DIRECTLY making the world a better place. We believe our borrowers have the potential to scale their organizations and make a real dent in these problems, or become a model for others to do the same.
For example, we were one of the first lenders to Revolution Foods when they were operating out of a defunct fast food restaurant in Alameda, CA. Today they deliver over 200,000 healthy meals a day to public school children.
Similarly, we think DC Central Kitchen’s model of combining culinary training for adults with barriers to employment with a robust meals business (they deliver 5,000 meals a day to schools and homeless shelters) is a winning approach that can be replicated throughout the country.
Nell: Some have argued that nonprofit leaders lack a level of sophistication when it comes to financial strategy and use of financial tools. Obviously you find nonprofits and social enterprises that are able to effectively employ sophisticated financial vehicles, so how do you respond to that argument?
Ted: Rather than argue I prefer to let the results of our borrowers speak for themselves. DePaul Industries, for example, is a $30 million non-profit that employs over a thousand disabled Oregonians. The Portland Business Journal ranked them one of the most admired companies in the state and they did this all with 98% earned revenue. Network for Good processes over $150 million of online donations every year while Digital Divide Data has a decade of year over year revenue growth in the field of impact outsourcing.
I see no lack of financial sophistication in the non-profit sector. I do, however, see a lack of risk-taking, which can sometimes be misinterpreted as unsophistication when compared with the for-profit world. It’s a shame this mentality is so pervasive because of the importance and urgency of the work that so many non-profits do. Many icons of industry have biographies filled with risky expansion, leverage, false starts and failures. We need to de-stigmatize failure in the non-profit sector and adopt that same boldness which has led to so many of the biggest successes in the commercial world.
- Download a free Financing
Not Fundraising e-book
when you sign up for email
updates from Social Velocity.
Sign Up Here
- Reinventing the Nonprofit Leader
It's time for a new kind of nonprofit leader, learn how to become one in this Social Velocity webinar.
- The Problem with Strategic Planning
- Social Media and the Future of Fundraising
- Financing Not Fundraising: Moving From Push to Pull
- Financing not Fundraising
- Calculating the Cost of Fundraising
- 5 Nonprofit Trends to Watch in 2011
- Financing Not Fundraising: 5 Lies to Stop Telling Donors
- 9 Ways Board Members Can Raise Money Without Fundraising
- Financing Not Fundraising: The Plan
- What is Social Innovation?