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After the Leap

Philanthropy, Government, and Nonprofit Excellence: An Interview with Daniel Stid

Daniel StidIn today’s Social Velocity interview I’m talking with Daniel Stid, Senior Fellow at the William and Flora Hewlett Foundation. Daniel serves as an advisor to Foundation president, Larry Kramer, leading the exploration of a potential Foundation initiative to support and improve the health of democracy in the US. Before joining the Foundation, Daniel was a longtime consultant and strategist to governments, nonprofits, and for-profit organizations, including as a partner in The Bridgespan Group’s San Francisco office, where he co-led the organization’s performance measurement practice.

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

Nell: You moderated a panel at the recent After the Leap conference about government and performance management. Government has a long history in the outcomes space, but there was some controversy at the conference about whether government can really lead this new movement. What role should government play in this new push toward nonprofit performance management?

Daniel: Yes, my Twitter feed was blowing up during that session with people adamantly saying that government couldn’t lead this push, it had to be nonprofits! To my mind this controversy misses the point. It presumes a hierarchy – that leadership is lodged in one place, and that it is exercised in one direction. The fact is that if we are going to make this “leap” happen, we need distributed leadership in multiple places: in government agencies, in operating nonprofits, in foundations, among researchers and program developers.

A great example is the Teen Pregnancy Prevention program administered by the Office of Adolescent Health in the federal department of Health and Human Services, the implementation of which I recently wrote about with some former colleagues at The Bridgespan Group. The Office of Adolescent Health administrators demonstrated leadership in conceiving and developing a bold and thoughtful program; the researchers and purveyors involved demonstrated leadership in creating evidence-based solutions and effectively supporting their implementation; and front line agencies demonstrated leadership in implementing these interventions with fidelity. What makes this program so compelling is that it has been animated by multiple forms of leadership that are networked and reinforcing each other across sector lines. I believe this same pattern occurs in most other situations where social change is happening at a large scale.

Nell: Your charge as a senior fellow at the Hewlett Foundation is to help explore how the foundation can “support and improve the health of democracy in the United States.” There have been some criticisms lately that philanthropy has moved away from supporting democracy and instead sometimes enhances wealth inequality. What are your thoughts?

Daniel: Insofar as this occurs, I believe this an inadvertent effect from the standpoint of individual donors. Most people want to give to something they can point to and/or that they can have affiliation with – hence the contributions of many donors to hospitals and arts organizations and universities, or to the schools that their children attend. This is straightforward and understandable. You can readily see and appreciate and be associated with what you are getting for your contributions. And it is philanthropy. We shouldn’t presume that all philanthropy can or should be geared toward reducing inequality. That is not the point of philanthropy in a free society. (Now whether all philanthropy needs to be and should be subsidized by the tax code is another question; I am on the record as saying it is high time to revisit the charitable deduction.)

The kinds of interventions that stand a chance of alleviating inequality – e.g., support for high quality early education, or effective teen pregnancy prevention – entail large-scale systems change and diffuse and uncertain impact for people typically living in very different communities from the philanthropists who are in a financial position to support them. They are for that reason a riskier philanthropic proposition. But many individual donors and foundations are making these investments anyway, and I bet we will see more of them do so as the evidence-base supporting solutions to inequality continues to be solidified.

Nell: Moving nonprofits to a performance management system will be costly. Do you think government can and should foot that bill, or can philanthropy? How do we create and fund the infrastructure necessary for this movement to truly succeed?

Daniel: Really good question! I don’t think that we can count on government to do it – for all of government’s resources relative to those of philanthropy, it is extremely rare that a government program will have the political and policy degrees of freedom, let alone the budget, to invest in nonprofit capacity in any sustained way. And the age of austerity we are in will only worsen this shortfall. To me this is a critical role for philanthropy to play. Just a portion of the billions that philanthropy puts to work in the service of education, health and human services, youth development, etc. could help assess and put to much better use the hundreds of billions that federal, state and local governments do across these areas.

Typically foundations see their role as scaling up initiatives that government can then “take out” and fund directly, freeing up the foundations to move on and fund their next ventures. Foundations should stay engaged rather than moving on and, by investing in the infrastructure and measurement capacity that government cannot pay for, help society get the most out of the far greater levels of government spending. Rather than seeking to “leverage” other foundations, to use some jargon, foundations should in effect be seeking to “leverage” government funding by increasing its impact.

Nell: Should every nonprofit work towards articulating and measuring outcomes, or does it primarily apply only to social service and education nonprofits? Is there a way for arts and cultural organizations, for example, to move toward outcomes management?

Daniel: I think every enterprise – whether it be a profit-seeking business, a government agency, or a nonprofit, whether it is producing cars and trucks, health and human services, or  arts and culture — should seek to get better at what it does. I found Jim Collins very persuasive on this point in his “Good to Great in the Social Sector.”

The desire to improve, to get better at things, is woven into the human psyche, and when this desire is given full expression, by individuals and the organizations they work in, so is our humanity. Whether this quest involves “outcomes” and “measurement” as we conventionally define them depends on context. It may well involve tracking audience surveys and visitor numbers and assessments by informed critics. But it may also involve a troupe rehearsing until it feels it finally has its performance nailed, or a museum director continuing to refine interpretive material that she thinks visitors are struggling to understand. Those behaviors reflect a relentless quest for outcomes in their own right. At the end of the day, performance measures are merely proxies to help us assess our progress toward what we are working towards: an underlying excellence. The excellence itself is really the point.

Photo Credit: Hewlett Foundation

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10 Great Social Innovation Reads: December 2013

Town2In my eyes, December was about three main things: the After the Leap conference about moving nonprofits to manage to outcomes, predictions about how the social sector will evolve in 2014, and the impact of the second annual Giving Tuesday. Added to the mix were some demonstrations of the growing wealth inequality (a prediction for 2014 from many) and a dash of controversy about the beloved TED Talks. It all made for a very interesting month.

Below are my picks of the 10 best reads in the world of social innovation in December. But please add to the list in the comments.And if you want to see more of what catches my eye, follow me on Twitter, Facebook, LinkedIn, or Google+.

You can also find the list of past months’ 10 Great Reads here.

  1. I already linked to several people’s great 2014 prediction pieces in my 5 Nonprofit Trends to Watch in 2014 post, but Tom Watson’s Trends and Collisions That Will Challenge the Social Sector in 2014 in Forbes is particularly thought-provoking. He takes what he calls a “meta approach” by analyzing themes from big social sector thinkers and “adding a few morsels to the stew.”

  2. One of the predictions on both my and Tom’s list was that the growing wealth inequality will become increasingly obvious. Robert Reich helps this trend by providing a scathing critique of modern philanthropy, arguing that it is becoming less about solving wealth inequality and more about reinforcing it: “Fancy museums and elite schools…aren’t really charities…They’re often investments in the life-styles the wealthy already enjoy and want their children to have as well.” And Peter Capelli, writing on the Harvard Business Review blog, seems to agree, but on the corporate side. He takes issue with “companies that pay poverty-level wages or thereabouts to their employees [while] spend[ing] a good deal of effort to be good corporate citizens in other areas.”

  3. Some people claim the second annual Giving Tuesday was a great success with a 90% increase in day-of online donations over last year, but others, like Michael Rosen, argue that Giving Tuesday is not actually channeling new money to the sector.

  4. The first-ever After the Leap conference in December promoted nonprofit performance management. Perhaps the high point of the conference was Nancy Roob’s (head of the Edna McConnell Clark Foundation) stirring keynote pushing both foundations to fund outcomes management and nonprofits to demand it. The Stanford Social Innovation Review did a great interview with her where she makes many of the same points, and an interview with Mario Morino, the main organizer of the conference.

  5. Writing in The Guardian, Paula Goldman from Omidyar Network discusses how, with impact investing, the blending of social and profit motives is really starting to take hold: “Fifteen years from now…We’ll look back on a host of innovations benefitting millions of disadvantaged people – in education, in healthcare,…in solar lighting—and will have a hard time remembering the day when people viewed charity and business as working towards opposite goals.”

  6. Leon Neyfakh writes a fascinating expose in the Boston Globe about donor advised funds, which he claims is “where charity goes to wait.” $45 billion—more than the endowment of the Bill and Melinda Gates Foundation – currently sits idle in donor advised funds and that amount is growing fast. A huge financial opportunity for the sector.

  7. The Center for Effective Philanthropy released a new study about how much impact foundation CEOs think their philanthropy has had. Philanthropy heavyweights Paul Brest and Lucy Bernholz each give their take on the study’s findings.

  8. I have loved writer Steven Pressfield since I read his fabulous The War of Art last summer. His blog about the creative process is a fount of knowledge and inspiration. His post in December about envisioning and embracing the future in your industry applies to nonprofits too.

  9. The idea of networked approaches to social change has been around for several years and is gaining momentum. Writing in the Nonprofit Quarterly, Mark Leach and Laurie Mazur describe “the power and promise of networked approaches to social change…creat[ing] a force larger than the sum of their parts.” Definitely a trend to watch.

  10. And finally, I love it when someone steps back and asks some hard questions about something that everyone else assumes is amazing. Benjamin Bratton does just that about the beloved TED Talks, which he claims “dumb-down the future.”

Photo Credit: Imperial War Museums

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Starting a Movement Toward Higher Performing Nonprofits

Athlete_at_starting_blockThis week I attended the After the Leap conference in Washington D.C. and was blown away. As I mentioned in a post earlier this year, the conference was organized by Social Solutions and PerformWell partners Child Trends and Urban Institute and builds on the momentum Mario Morino has created around his book, Leap of Reason, published in 2011, and the companion book Working Hard & Working Well by David Hunter published this year.

This first-ever conference was an attempt to bring the nonprofit, philanthropic and government leaders who are on the cutting edge of the movement to create a higher-performing social sector together to, as Mario put it “grow a critical mass who can mobilize for greater change.”

What’s Government’s Role in Nonprofit Performance?
Day 1 focused on government’s role in driving social sector performance management. A fascinating panel of government agency leaders, moderated by Daniel Stid from the Hewlett Foundation, discussed various efforts at the federal, state and local government levels to drive evidence-based policy and practice. But some in the audience and Twitter-verse wondered whether government could really be the impetus for a greater push towards measuring and managing outcomes in the nonprofit sector.

How Do You Get Buy-In For Change?
From the big, systemic view, the day quickly shifted for me to the organization-level with the fantastic panel on “Getting Buy-In” from staff, board and funders for a shift towards performance management. Isaac Castillo from DC Promise Neighborhood Initiative, Bridget Laird from Wings for Kids, and Sotun Krouch from Roca explained how they had moved their nonprofits toward articulating and measuring outcomes. The most effective approach seemed to be to ask “Don’t you want to know whether the work we are doing is helping rather than hurting?” Isaac made the urgency to move toward performance management clear, “If you haven’t started doing performance management yet, in 12-18 months you will start losing funding to those who are.”

Can We Convince Funders to Invest?
Day 2 of the conference kicked off with an inspiring keynote address by Nancy Roob from the Edna McConnell Clark Foundation that really served as a call to action for the foundation world. Nancy painted a pretty stark picture of the disconnect she saw between how much money we’ve spent on solving social problems in the last decades and how much actual progress we’ve made. She blamed this disconnect on “our piecemeal approach to solutions.” As she bluntly put it, “We are woefully under-invested in what we already know works.” She laid out 5 steps funders can take to move away from piecemeal and toward transformational social change:

  1. Make bigger, multi-year investments
  2. Provide more upfront, unrestricted, flexible capital
  3. Invest in nonprofit evidence building
  4. Scale what works with innovation, and
  5. Adopt an investor mindset

But for Nancy, it’s not just up to funders, nonprofits also need to change. She urged nonprofits to:

  1. Shed the charity mindset
  2. Focus on the larger context
  3. Create a performance management culture, and
  4. Ask for help to achieve performance

From there, Phil Buchanan from the Center for Effective Philanthropy led a panel with Carol Thompson Cole from Venture Philanthropy Partners and Denise Zeman from Saint Luke’s Foundation asking “Do Funders Get it?” While a few funders are willing to invest in helping nonprofits articulate, measure and manage to outcomes, most are not. The panel suggested that some of this reluctance stems from funder’s lack of humility and fear of what they might find. Audience members suggested that it might also be funders’ lack of performance expertise. (You can read Phil Buchanan’s blog post giving more detail on this panel here.)

From there I attended a breakout session “Funder Investment Strategies to Strengthen Nonprofit Performance Management Capacity” where Victoria Vrana from the Gates Foundation and Lissette Rodriguez from the Edna McConnell Clark Foundation and two of their grantees discussed how they worked together to fund and create performance management systems.

The final panel of the day brought an impressive group of nonprofit CEOs together (Mindy Tarlow from Center for Employment Opportunities, Sam Cobbs from First Place for Youth, Cynthia Figueroa from Congreso de Latinos Unidos, Bill McCarthy from Catholic Charities of Baltimore, and Thomas Jenkins from Nurse-Family Partnership) to talk about how they each had built a performance management system at their organizations, the hurdles they encountered, how they funded it, and where they are now.

Where Do We Go From Here?
Mario Morino rounded out the conference with an inspiring call for us to build momentum. He outlined some new ideas coming out of the conference that he’d like to see developed by 2020, including:

  1. A “Manhattan Project” of social sector evidence
  2. A National Commission on Nonprofit High Performance
  3. An Aggregated Growth Capital Fund to deploy billions to solve entrenched national problems
  4. A Performance Academy for Social Impact
  5. Presidential Performance-to-Impact Awards
  6. Social Sector Center for Quality Improvement
  7. A Solutions Journalism Network to “lift up the hope spots” in the country
  8. Leap Learning Communities in local settings connected in a national web

This was one of the best conferences I’ve been to in years. The caliber of the presenters and audience was amazing. It felt like I was witnessing the birth of the next generation of the social sector. Buoyed by the ability to see the writing on the wall, this group is determined to lead the fundamental, and critical, shift towards a more effective sector.

You can read the Twitter feed from the conference here and learn more about the movement here.

The urgency of this movement became increasingly clear through the course of the two days. Our country is witnessing mounting disparity and crippling social challenges. It is increasingly up to the social sector to turn the tide. And the time is now. As Mario charged at the end of the conference “If we don’t figure out how to build high performing nonprofits, nothing else matters. This is the last mile. Our nation depends on it.”

Photo Credit: tableatny

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Upcoming After the Leap Conference

slide_titleThere is a new conference in the social innovation space that I’m pretty excited about. After the Leap is the brainchild of Social Solutions CEO Steve Butz and his PerformWell partners, Child Trends and Urban Institute. The conference builds upon the momentum Mario Morino has created around his book, Leap of Reason, published in 2011.

Since writing Leap of Reason Mario has been on a crusade of sorts to the get the nonprofit sector to acknowledge that our new Era of Scarcity requires nonprofits to “literally reinvent themselves…[and] respond with greater discipline, unity, and focus on making a quantum change in the effectiveness and impact of our entire sector.” In essence he is encouraging nonprofits to determine what they exist to change and whether they are actually creating those changes.

You can read my interview with Mario here and my review of Leap of Reason here.

As part of this movement, Mario and others have organized the After the Leap conference that will allow you to learn from experts in the field about how executives, practitioners and funders are advancing outcomes measurement and performance management, and what you can do in your own organizations and communities. The After the Leap conference will be held in Washington, D.C. on December 3rd and 4th.

Some of the keynote speakers include:

  • Melody Barners, Former Director of the White House Domestic Policy Council
  • Nancy Roob, President of the Edna McConnell Clark Foundation
  • Daniel Cardinali, President of Communities in Schools, and
  • Mario Morino

And the breakout sessions will cover everything from the Social Innovation Fund, to finding money for evaluation, to nonprofit case studies, to how to implement performance management systems, to effective leadership and much more.

Breakout session speakers are coming from the Gates Foundation, the Urban Institute, the Center for Effective Philanthropy, the Promise Neighborhood Initiative, and other foundations, nonprofits and agencies at the leading edge of the outcomes movement.

I’m so excited about the conference that I’ve already registered. And I’ll be blogging and Tweeting from the conference as well.

If you are a nonprofit leader, board member, or funder interested in pushing your nonprofit towards measuring outcomes, this conference is for you. You can register here.

I hope to see you there!

 

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