I have to admit, June was a busy month for me with lots of travel and events, so I was less tuned into social media. Thus, I am offering a far from definitive list of the best reads from the month. But here goes…
New data on charitable giving and social fundraising, and a new effort to create a system to classify philanthropic activity made for some exciting developments. And because it wouldn’t be a great month in the world of social innovation without lots of debate, there is also plenty of criticism of philanthropists, philanthropic consultants, and business theory. It all made for a great month in the world of social innovation.
Below are my 10 favorite reads from the last month. But this month, more than ever, please add what I missed to the comments. And if you want to see a longer list of great reads, follow me on Twitter, Facebook, LinkedIn or Google+.
And you can see past months’ 10 Great Reads lists here.
- Good news for charitable giving, it looks like total US donations will go back to their 2007 peak of $350 billion sooner than originally thought. The post-recession rebound will happen sometime this year or early next, according to new data.
- And adding to the data about giving, the Nonprofit Tech for Good blog shares some great statistics about fundraising, social media and mobile.
- The Foundation Center has embarked on a bold project to create a robust classification system for philanthropy. They have created a draft “Philanthropy Classification System,” which is a “structure for describing the work of philanthropy consisting of subjects, population groups, transaction types, and approaches (support strategies)” and opened it to public comment. Their goal is to “unleash the ability of foundations to work far more efficiently with each other and with other sectors to achieve the kind of scale that can drive real change in the world.” It’s fascinating. Take a look and give them your thoughts.
- The Packard Foundation is one of the great examples of foundations that understand and support nonprofit organization building. They have created a great wiki on “Organizational Effectiveness” with resources for other grantmakers interested in supporting nonprofit organization building. And my favorite resource on the list is the article from Linda Baker, a Packard Foundation program officer, urging foundations to “be the duct tape” for nonprofit grantees. Ah, if only more philanthropists thought this way!
- But not all philanthropy news is good news. A report on the Walton family shows that the second generation heirs to the Walmart fortune have given almost none of their personal fortune to philanthropy, despite being the richest family in America. The report and the Forbes article about it raise some interesting questions about wealth and the obligation of philanthropy.
- One of the newest and most talked about ways to channel money to social change is the social impact bond. But what are we learning as the pay for success movement gains steam? Gordon Berlin from MRDC shares some insights from the New York City social impact bond and demonstrates how incredibly complicated this new financing tool really is. As he says, “The future of the Pay for Success movement rests on building on the lessons learned from the first efforts to implement these new and potentially transformative financing structures.” So we need to get beyond the hype and understand if this new financial vehicle really can work.
- And speaking of questioning hype, Jill Lepore, writing in The New Yorker, pens a scathing critique of Clayton Christensen’s Innovator’s Dilemma. She illuminates the danger of an omnipotent theory that allows no analysis or critique. She takes Christensen’s ubiquitous business theory of “disruptive innovation” to task, arguing, “Disruptive innovation is a theory about why businesses fail. It’s not more than that. It doesn’t explain change. It’s not a law of nature. It’s an artifact of history, an idea, forged in time; it’s the manufacture of a moment of upsetting and edgy uncertainty. Transfixed by change, it’s blind to continuity. It makes a very poor prophet.”
- Another writer peeling away the curtain on theory that holds no weight, Phil Buchanan admonishes consulting firm FSG and the Stanford Social Innovation Review for 1) not recognizing sooner that urging foundations to create individual institutional strategies around their unique positioning and activities is flawed, and 2) failing to acknowledge that many other thought leaders have been discussing that flawed strategy for years.
- As an introvert myself, I loved Frank Bruni’s piece in The New York Times urging politicians to take more time alone to reflect before barreling forward. As he puts it, “Some of the boldest strokes of lightning happen in isolation, where all the competing advice can be processed, where the meaningful strands come together and the debris falls away.” Amen!
- If you want a visual that will blow your mind, check out Ezra Klein and Susannah Locke’s 40 Maps that Explain Food in America. Access to food is a core social challenge, and these maps lay it all bare.
Photo Credit: Spirit-Fire
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
Controversy about whether Millennials will spend money differently than their parents to create change, arguments for greater philanthropic risk, examples of innovation in the arts, use of “Moneyball” in conservation and policymaking efforts, and the lure of online media to create social change. What more could you want from a month of social innovation reading?
You can also see all of the 10 Great Reads lists from past months here.
- Man, I love a good controversy. In April the Obama administration invited Millennial philanthropists to the White House to discuss next generation philanthropy. And The New York Times sent Millennial reporter (and heir to the Johnson & Johnson fortune) to cover it. Well, Jim Newell from The Baffler doesn’t buy the argument that Millennials are going to use money differently than their predecessors. But Jed Emerson and Lindsay Norcott think Millennials will actually take impact investing mainstream.
- And staying on the controversy train just a bit longer, William Easterly takes issue with celebrity famine relief efforts that ignore (and potentially make worse) the lack of democracy causing famine in the first place.
- Because achieving scale is incredibly difficult work, Jeff Bradach from The Bridgespan Group launched an 8-week series on the Stanford Social Innovation Review blog exploring how we achieve it. 16 thought leaders will “weigh in with their insights, struggles, and questions regarding the challenge of achieving impact at a scale that actually solves problems.”
- It seems that the arts, perhaps more than other issue areas, are on the front lines of innovation in order to stay relevant. And this month really brought those struggles home. First, the Houston Grand Opera has seen dramatic growth in audiences, bucking a declining trend elsewhere, by appealing to broader audiences. Perhaps the San Diego Opera could have learned something from Houston since their declining audiences (and poor governance decisions) have put them in danger of closing their doors. And ever at the ready with examples of how arts organizations are innovating and adapting, ArtsFwd released two case studies on how the Woolly Mammoth and Denver Center Theater Companies have embraced adaptive change.
- What’s with Moneyball (the movie and book about using data to drive major league baseball strategy) everywhere lately? Using data and smart strategy the Nature Conservancy is getting more effective at conserving bird habitats. And David Bornstein thinks the federal government is getting into the game as well with an increase in data-driven policy making.
- The Pew Research Center just released a book, and corresponding interactive site, about the changing demographic face of America and how it could affect everything, “Our population is becoming majority non-white at the same time a record share is going gray. Each of these shifts would by itself be the defining demographic story of its era. The fact that both are unfolding simultaneously has generated big generation gaps that will put stress on our politics, families, pocketbooks, entitlement programs and social cohesion.”
- Should philanthropy embrace more risk? Philanthropist Laurie Michaels founder of Open Road Alliance, which provides funding to help nonprofits overcome unforeseen roadblocks or leverage unanticipated opportunities, thinks so. Michael Zakaras interviews her in Forbes. As she puts it, “Very few people in the finance industry predicted the economic collapse in 2008, and yet we ask NGOs to submit a plan that will be stable for several years, which is an impossibility in the best of circumstance.” Amen!
- On the NPEngage blog, Raheel Gauba answers the fascinating question: “If Google were a nonprofit, what would its website look like?”
- And speaking of nonprofits online, the PhilanTopic blog released an infographic summarizing the 2014 M+R Benchmarks Study about nonprofit online activity.
- Moving on to other forms of media, I love what’s happening with video games and the innovators who are adapting them to help solve social problems. Who knew that playing Minecraft could actually change the world?
Photo Credit: Mikel Agirregabiria
Heather Mansfield’s newest book, Mobile for Good, is a nice complement to her 2011 book, Social Media for Social Good. This time around, she adds mobile to the “new media” mix and gives a detailed approach for nonprofit leaders ready to embrace changing technology.
In Mobile for Good, Mansfield sounds a warning call to nonprofit leaders. The tide of new media is swift and those nonprofit leaders who don’t embrace it will be left behind:
“Your nonprofit would be wise to assume and act upon the fact that more than 50 percent of your website traffic will occur on screens varying in sizes from one to six inches by 2016.”
And, contrary to popular belief, this shift is not just among the youngest generations of potential donors. Every generation – from Silent, Baby Boomers, Gen X, Millennials, to Gen Z – is increasingly discovering and giving to nonprofits online.
But Mansfield is not suggesting that nonprofits chuck all fundraising vehicles in favor of a singular new media approach. Rather, she urges nonprofits to embrace a multi-channel fundraising strategy, “using print, web, and email communications, and mobile and social media in order to appeal to donors of all ages and socioeconomic backgrounds.”
And in fact, reports on the death of email are unwarranted. In fact, it’s enjoying a rebirth:
“Email is not dying. It’s growing. Furthermore, every email address that your nonprofit accrues translates into $13 in online donations over a one-year period. If you think this trend is isolated to Gen X and older, it’s worth noting that 65% of Millennials subscribe to nonprofit e-newsletters.”
The key, however, is making sure that everything (your website, your e-newsletters) is responsively designed, meaning that it automatically converts to fit whatever is being used to view it (laptop, phone, tablet).
Mansfield urges nonprofit leaders to invest in new media. The nonprofit sector’s desire for free or very cheap technology solutions isn’t realistic anymore:
“It’s imperative that you find the funds and the tech know-how to position your nonprofit for future survival…One of the downsides of the rise in social media is that it has inadvertently resulted in nonprofits becoming overly accustomed to and dependent upon “free” online tools. This mindset is becoming destructive to the sector istelf…The era of free is over.”
Mansfield devotes a chapter to each of the main social media networks and gives tips and best practices for each. The problem with writing a book about such a quickly evolving space, however, is that it becomes out of date before it even hits the shelf (for example Facebook’s recent organic search changes, and LinkedIn’s discontinued Products and Services tabs). So you must view Mansfield’s tips in a larger context, and for real-time updates you can check out her Nonprofit Tech for Good blog.
Overall I think the book holds a good deal of value for nonprofit leaders, however, I do have two criticisms.
First, for the nonprofit leader already overwhelmed by new media Mansfield doesn’t effectively prioritize where to focus. By including all major social media networks and all new fundraising tools (including untested ones like Crowdfunding) she leaves the impression that there is an endless and equally valuable list of innovations to embrace. Without a framework for prioritizing where to focus it is easy for the already overwhelmed nonprofit leader to give up. She could have discussed the merits of focusing on some of the bigger bang for your buck social media networks (like Facebook) while letting others (Pinterest) go if time doesn’t allow. Or thinking through a nonprofit’s target audience and their habits and preferences in order to prioritize staff time.
Second, I must take Mansfield to task for perpetuating the nonprofit overhead myth – the idea that nonprofits should separate their “program” and “overhead” costs. As I’ve mentioned before, this myth is incredibly destructive to nonprofits by forcing them to hide or ignore the true costs of their work. In Mansfield’s “Online Fundraising” chapter, she lists 10 best practices, of which #6 is to “Include Program Versus Operating Expense Graphics,” suggesting that nonprofits create “a pie chart graphic that shows your low fundraising and operating costs.” She goes on to mention the Overhead Myth Campaign in passing, with no irony about how she is perpetuating the myth itself. Ugh.
At the end of the day, Mansfield provides a nice overview of the rapidly changing new media landscape and some great steps for what nonprofits can do to keep up.
Photo Credit: nptechforgood.com
Could it be that the nonprofit sector is coming into its own? Increasing prominence in the economy coupled with a growing (we hope) recognition of the need for stronger organizations, the nonprofit sector may be hitting its stride. Add to that some interesting discussions about the effect of crowdfunding and a “revitalizing” Detroit and you have a pretty good month of reading in the world of social innovation.
You can also see my favorites from past months here.
- It appears that the nonprofit sector is beginning to take center stage in a new economy. The rise of the “sharing economy,” where products and services are shared by many rather than owned by one (think Netflix, Car2Go, HomeAway), apparently holds tremendous opportunity for the nonprofit sector. So says Jeremy Rifkin in the New York Times, “We are…entering a world partly beyond markets, where we are learning how to live together in an increasingly interdependent, collaborative, global commons.” Erin Morgan Gore (writing in the Stanford Social Innovation Review) would agree.
- But at the same time, NPR describes a growing individualism in America and an emerging “Opt-Out Society.”
- And lest you forget why we do this social change work, Robert Samuelson, writing in the Washington Post, describes some “menacing mega-trends” facing America and our political system’s inability to keep up.
- We continue to be fascinated by the Millennial generation and this infographic very nicely puts to rest some myths about them.
- Writing in the Huffington Post, Ashley Woods questions whether the recent focus on revitalizing Detroit is helping or hurting long-time residents.
- Crowdfunding is increasingly gaining interest, but can it actually increase money flowing to social change? A new infographic by Craig Newmark, founder of Craig’s List, describes some recent crowdfunding results for nonprofits. And Beth Kanter digs deeper into the data.
- The CEO of The California Endowment, Dr. Robert Ross makes a compelling argument for why foundations need to move beyond funding new solutions and instead get into the advocacy and community organizing game: “Philanthropy has to recognize that community power, voice, and advocacy are, to use a football analogy, the blocking and tackling of winning social change.”
- Are funders beginning to understand the need to invest in nonprofit capacity building? Some recent research by The Center for Effective Philanthropy shows that, not surprisingly, nonprofit leaders think funders don’t understand their need for help with sustainability. But some new data from Grantmakers for Effective Organizations finds that funder appetite for capacity building might be growing. And Rodney Christopher from the F.B. Heron Foundation makes the case for support of capacity building, “Failing to pay attention to nonprofits as enterprises will undermine impact over time.”
- But Kate Barr from the Nonprofits Assistance Fund places a big part of the burden of overcoming the nonprofit overhead myth squarely on the shoulders of nonprofit leaders themselves.
- Albert Ruesga, head of the Greater New Orleans Foundation and contributor to the White Courtesy Telephone blog, very thoughtfully breaks down how to understand philanthropy’s relationship to social change. Well worth the read.
Photo Credit: Alfred Hermida
I am amazed by the reaction of some nonprofit leaders when faced with a budget shortfall. Some simply shake their head in innocent confusion, some blame an “inexperienced” development director or a “checked-out” board, and others throw together a knee-jerk fundraising event in order to stem the tide.
But a much better approach, when you don’t have the money your nonprofit needs, is to step back and assess the viability of your nonprofit’s overall money function, which is the topic of today’s installment in the ongoing Financing Not Fundraising series.
If you want greater, more reliable funding for your nonprofit, you must get strategic. And the first step to any real strategy is analysis.
Instead of viewing the money that flows to your nonprofit as a side note, or worse, a completely uncontrollable force, you must view money as a very necessary and integrated function that is just as important as your nonprofit’s programmatic function. And in order to determine how well your money function operates and how to transform it, you must assess it.
A transformative financial model assessment uncovers how all aspects of the organization contribute to or detract from money flowing through the doors. It analyzes the financial impact of 7 areas of the organization, like this:
Does your nonprofit have a long-term strategy that integrates money, programs and operations? Does your strategy help articulate the value your nonprofit provides the community in order to compel outsiders to invest? Does your strategy include measures for whether that value is actually being created?
- Mission and Vision
Does your nonprofit have clear, compelling vision and mission statements? The two statements are not “nice to have” marketing language, rather they articulate the very essence of why your nonprofit exists. Does your vision paint a bold description of the social change you seek? Does your mission describe the day-to-day work towards that vision?
- Board and Staff Leadership
Does your board have the skills, experience and networks necessary to execute on your strategic plan? Are they engaged and invested? Are they actively connecting the organization to people, resources, partnerships? Does your staff have the knowledge and experience necessary to make money flow? And are they structured and managed effectively?
- Program Delivery and Impact
As a nonprofit you have two sets of “customers.” Those you serve (or your “clients”), and those who fund those services (or your “donors”). Without a compelling and effective delivery of services to clients, donors won’t fund those services. Is your nonprofit strategic about which programs to grow and which to cut? Do you measure the effect of your programs on clients? Are your programs financially viable, or are too many of your programs mission-rich, but cash-poor?
- Marketing and Communications
Do you make a compelling case for your work and for support of it? Once you’ve made the case, are you using the right marketing channels (website, social media, events, email, etc.) to attract and engage your target funders, volunteers, advocates, board members and other supporters?
- External Partnerships
In order to move the mission forward and in order to attract funders, volunteers, advocates you must be strategic about building alliances that make sense. Do you have the necessary external relationships to execute on your strategy? Are you constantly working to strengthen or grow the right partnerships in the right ways?
- Financial Model
And only now do we look specifically at money. Because without all the previous elements (thoughtful strategy, compelling vision and mission, strong leadership) money simply will not follow. Does your funding mix fit well with your mission and core competencies? Are there other revenue streams that make sense to pursue? Are there fundraising activities that are actually costly rather than profitable?
When money isn’t working the way you want it to, don’t stick your head in the sand. Wrest the money sword from the beast of chance by taking a hard look at your nonprofit’s money function.
If you want to learn more about the Financial Model Assessment I provide clients, click here. And if you want to learn more about the Financing Not Fundraising approach, download the newest e-book in the Financing Not Fundraising series, Financing Not Fundraising volume 3.
Photo Credit: Pen Waggener
January was all about wealth inequality, all the time. The 50th anniversary of President Johnson’s War on Poverty was an appropriate backdrop to growing unease about the fact that the rich are getting exceedingly richer.
But there is much debate about what the solution is and even how to frame the problem. And where do nonprofits fit in, and what does it all mean for the future? It is an enormous, far-reaching and complex problem.
Below are my picks of the 10 best reads in the world of social innovation in January. But please add to the list in the comments. And if you want more, follow me on Twitter, Facebook, LinkedIn, or Google+.
You can also find the list of past months’ 10 Great Reads here.
- This year marks the 50th anniversary of the launch of President Johnson’s War on Poverty. Despite the long attack, wealth inequality is getting worse, not better, and is becoming a very hot topic. But Mark Schmitt, writing in New Republic, takes issue with how the inequality conversation is being framed. He argues that “we need a way to talk and think about inequality that presents it as a system, and then finds the points of intervention that might actually change the system.”
- Thomas Piketty’s new book, Capital in the Twenty-First Century, due out in March and reviewed this month by Thomas Edsall in the New York Times, takes reframing the inequality conversation even further. Piketty makes a rather depressing argument that when viewed over history wealth inequality is the rule rather than an anomaly and without huge systemic change (like a global wealth tax) will only get worse.
- And where does the nonprofit sector fit in? Mark Rosenman argues that nonprofits should play a pivotal role in advocating for change: “If the United States is again to be a nation where upward mobility applies to more than those already near the top, nonprofits must exercise their moral authority and advocate for economic policies that give a hand up to the poor and advance a vision of the common good that includes all Americans.”
- The often employed method to combat poverty – education – may not be the answer anymore. Clay Shirky takes higher education to task for “preserving an arrangement that works well for elites—tenured professors, rich students, endowed institutions—but increasingly badly for everyone else.”
- But for David Bornstein, appropriately from the world of solutions journalism, there are still some bright spots to point to in the War on Poverty.
- Maybe part of the solution lies in changing our measures of success. This video suggests we move from Gross Domestic Product to a Social Progress Index to measure a country’s success.
- They say long-form journalism is coming back and let’s hope so if Drew Philp’s piece “Why I Bought A House In Detroit For $500” is an example of the trend. He beautifully describes the process of investing his heart and soul in a house and neighborhood in crumbling Detroit.
- And, on a related note, it turns out that “gentrification” may not be a dirty word anymore, according to NPR.
- In other news, writing in the Nonprofit Quarterly Eileen Cunniffe provides some interesting examples of how arts nonprofits are reinventing themselves and their relationship to money.
- Finally, the Nonprofit Tech For Good blog rounds up 19 really interesting social media and fundraising infographics for nonprofits.
Photo Credit: University of Iowa Libraries, 1960
In today’s Social Velocity interview, I’m talking with Katherine Lorenz, president of the Cynthia and George Mitchell Foundation. In late 2012, Forbes Magazine named Katherine “One to Watch” as an up-and-coming face in philanthropy. She also serves on the board of directors of the Environmental Defense Fund, the Institute for Philanthropy, Puente a la Salud Comunitaria, and the Association of Small Foundations.
Nell: There is a lot of interest in the next generation of philanthropists—Millennials who stand to inherit the largest wealth transfer in history. How do you think this next generation of philanthropists will be different than their predecessors and why?
Katherine: I do believe this next generation of philanthropists will be different than their predecessors. People tend to become interested in a specific issue or cause based on a personal experience—something that impacts their lives profoundly. It is only natural that this next generation of philanthropists will do their philanthropy differently; they grew up in a world that looked very different than the world their parents and grandparents grew up in. Things like 9/11 and social media were formative experiences for Millennials, so it should not be surprising that they will think differently than previous generations—just as the Great Depression had such an impact on the way their grandparents lived their lives and did their philanthropy.
A recent study by 21/64 and the Johnson Center on Philanthropy about next gen donors showed that this generation is more clearly driven by impact and effectiveness in their philanthropy than generations before them. They also want to be more hands-on in their engagement with an issue or an organization—they want to serve on boards or get involved in a more concrete way than just writing a check. They look at financial resources as only one tool in the toolbox, and seek to bring many other resources at their disposal to create change in the world.
Nell: Do you believe that next gen donors will actually divert more money to organizations that can prove they’ve created social change? Are we going to see the needle move in terms of funneling more money to proven social change efforts under their watch?
Katherine: I am not sure if we will actually see Millennial donors divert more resources to organizations that can prove they are creating social change. While I do believe this generation will ask for more metrics, and want to know the impact they are having more than previous generations, I think this group will also be open to taking more risks as they search for innovative solutions. In taking more risks, there will be more failure but also potential for more significant social change if the risk pays off. In sum, I think next gen donors will risk more and fail more than previous generations, although this should create more innovative methods that address the issues they care about.
Nell: What is your view on how family philanthropy evolves over time? For example, your grandparents’ generation’s understanding of and opinions about climate change are quite different than views about climate change now. How do changing views affect a philanthropic approach over time?
Katherine: I think that family foundations evolve with generational changes more in how they address issues than in what they address. Often a family holds very strong beliefs and values, and those are passed down from generation to generation. For example, my grandfather funded sustainability issues for more than 40 years, primarily funding large institutions or creating new institutions, and trying to bring businesses into the conversation. While climate change was an issue he cared about, the larger picture of how the earth will sustain a growing population with finite resources drove him. Those values and interests are acutely present in his children and grandchildren, although how we do philanthropy to address these issues is slightly different.
With more science available, it is clear that climate change is very clearly the biggest threat to a sustainable planet, and we are using different tools than my grandfather did to address the issue—more grassroots organizations, more policy and advocacy work, and less of a focus on big institutions. Our values around this topic very much came from my grandfather’s passion, but our approach in addressing the issue is quite different. I think a difference in generational approach is common in family foundations.
Nell: How do you think philanthropy could be more effective and better help nonprofits create change? What shifts in the philanthropic landscape are you particularly excited about seeing?
Katherine: I think one of the biggest problems in the non-profit sector stems from the relationship between the donors and their grantees. Donors often ask grantees to do special reporting or won’t pay for overhead expenses or ask them to do something outside of their current strategy. Grantees are often compelled to do these things in order to obtain funding, although sometimes they spend more time trying to please donors than doing the work at hand. Donors have unrealistic expectations of grantees, and non-profit leaders usually spend more time fundraising than working on the issue they were funded to address.
I would really like to see donors and grantees operate more like partners, and less like one is doing a favor for the other in exchange for funding. I would like to see donors fundamentally shift the conversation from a focus on lowering overhead costs to a focus on maximizing social benefit. Who cares if overhead is high if the organization is actually making a dent in the issue they’re trying to solve?
One shift I see in the philanthropy world that excites me is the growing number of groups that exist to help donors be more effective. Donor education is growing in popularity. Inheritors are realizing that doing philanthropy well is a serious job and requires training. As the field of donor education grows and formalizes, I think we will see donors doing a better job of allocating resources for social benefit.
Photo Credit: Cynthia and George Mitchell Foundation
- Download a free Financing
Not Fundraising e-book
when you sign up for email
updates from Social Velocity.
Sign Up Here
- Tired of begging your
board to raise money?
Learn how to
Build a Fundraising Board
in this month's
Social Velocity webinar.