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Bill Shore

The Tricky Work of Scaling Nonprofits

Social Impact ExchangeThe idea of “scale,” or growing to a point at which you are solving the underlying social problem, is a tricky one in the nonprofit sector and something that is a growing topic of conversation.

Jeff Bradach from The Bridgespan Group launched a new 8-week blog series on the Stanford Social Innovation Review blog last month about what he calls “Transformative Scale.”

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

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Nonprofits Must Leave the Kid’s Table: An Interview with Cindy Gibson

Cindy GibsonIn today’s Social Velocity blog interview, I’m talking with Cindy Gibson. Cindy is a consultant to national foundations and nonprofits providing support to improve capacity and program effectiveness. She is a widely published author and blogger on issues affecting the nonprofit and philanthropic sector. Cindy has been named one of the Nonprofit Times’ Power and Influence Top 50.

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

Nell: Your writing tends to pull back the curtain on some of the “politeness” that goes on in the nonprofit sector and encourages more authentic conversations. Yet the tendency to seek consensus instead of conflict is fundamental to the sector and its long history, so how and where do we start having more productive, challenging conversations as a sector?

Cindy: This question nicely acknowledges the unique role the nonprofit sector can and does play in an increasingly polarized world, but that doesn’t mean the same sector necessarily values consensus over all else, including conflict. Historically, nonprofits have been at the forefront of passionate debates over some of the most difficult and divisive issues we’ve ever faced as a country—civil rights and abortion, for example.

Relatively speaking, though, nonprofits may be less predatory when it comes to how they work and the goals they want to achieve. That’s all good, but it doesn’t mean that nonprofits are or should be immune from criticism or legitimate questions about what they’re doing, how and for what purpose. Unfortunately, I think we’ve become so averse to that kind of open dialogue and critical analysis. As a result, the few people who are brave enough to raise questions are immediately labeled as “negative” or “a naysayer,” which slams the door shut on any hope of deeper discussion.

I think that’s because challenge sometimes is seen as being critical of the good intentions behind doing “God’s work.” But good intentions aren’t mutually exclusive from honesty and critical thinking. Honesty with the intent of finding out where there’s agreement, disagreement, what’s substantive and what’s smoke and mirrors can be transformational. After all, just because we might believe something is “effective,” doesn’t mean that it actually is. The danger in eschewing healthy skepticism is that organizations that aren’t particularly effective but receive a disproportionately high percentage of funding leaves organizations that are getting results with less support.

I can think of at least two examples of organizations – one national and one international – that have instant name recognition and are frequently held up as exemplars. Both have very charismatic leaders and are extremely savvy in marketing themselves and their brand. Both organizations, however, also have been the focus of studies by highly credible evaluators who found little or no data demonstrating their effectiveness. In fact, what data does exist shows that these groups are actually failing to achieve their stated missions. Nevertheless, they continue to receive millions of dollars from the same foundations that tout the virtues of evidence-based philanthropy, and their nonprofit colleagues continue to roll their eyes privately when these organizations are trumpeted as “models.”

Another place where critical thinking (and honesty) is desperately needed is when new organizations that may be replicating what others have been doing for years are hailed as “innovative.” And in fact, without more healthy skepticism, we’ll continue to lag behind other fields when it comes to innovation, which is built on critical thinking and disruption.

I think the first step toward breaking this cycle is to provide more platforms that are intentional about giving where people can express their opinions and ideas without fear of ad hominen attacks that tend to squelch the discussions we need to have. We can loosen up the tightly buttoned format of some of these events and allow for more humor, personality and insouciance. Fewer power points, more spontaneity.

We also need more venues in which to suss out what’s hype and what’s real so that people outside the inner circles of “the newest best thing” can understand what’s being promoted and what they think about it. Take social impact bonds, for example. A lot of what’s written about these is by people who are steeped in finance backgrounds, leaving those who aren’t confused and, in turn, disinterested in finding out more. As a result, there’s little serious debate about whether these are really all they’re cracked up to be, since there’s not much hard evidence, to date, as to whether they work. Yet, millions of dollars have been poured into their creation and rollout.

We also need more investigative journalism about nonprofits and philanthropy—not just in the mainstream but trade press as well. That’s difficult, given that most nonprofit information sources tend to be supported with grant dollars, making it difficult for them to be openly critical or truthful, especially when it comes to funders. But as foundations and nonprofits veer into territory previously relegated to either government or the private sector, there will be more attention focused on the issues that are natural byproducts of these changes: public accountability, mission creep, profit motivation and others. We’re already seeing it in stories about whether foundations have too much power in influencing public policy and whether citizens are being left out of important decisionmaking processes that involve only those with the financial resources to have access to that table. Something we can do right now though is encourage the same news outlets that don’t hesitate to cite “anonymous sources” in other fields to do likewise in reporting about philanthropy, which can be just as retributive against people who go on the record with critical comments.

Nell: One of the most difficult places for open, honest conversation is between nonprofits and the philanthropists who fund them because of an inherent power imbalance. Can we ever hope to overcome that and if so, how?

Cindy: While there is clearly a power imbalance baked into most transactional dynamics—including funding—I think it’s important that we don’t frame the need for more honest conversation as one that’s only about the funder/grantseeker relationship, which can usually be summed up as “funder bad, grantseeker good.”

I’d suggest that nonprofits themselves are reluctant to engage in honest public discussions about their peers.That silence is understandable, but it can be self-defeating—for both nonprofits and grant makers. Nonprofits aren’t given the chance to have thoughtful and open conversations about what’s not working so they could use that information help them strengthen their own activities. And philanthropists don’t have the benefit of getting honest, first-hand perspectives from a broad array of organizations with expertise.

Happily, I think there are larger, cultural currents that may break this logjam. Some of these stem from technology, which is driving more interactivity and transparency and democratizing what were once closed institutions to allow more meaningful participation for “real people.” These changes are also upending traditional hierarchical management structures, which rests on the premise that rank is power, to more collaborative and fluid systems based on ecosystem thinking. Clearly, we’re already seeing these trends disrupting entire fields such as journalism, education, and politics.

Young people in particular, “get it.” Frustrated by traditional institutions, they’re doing an end run around those organizations and creating new models of social innovation and change. They’re becoming social entrepreneurs unencumbered by bureaucracy, launching web-based giving circles where everyone’s a partner, and using social media to generate engagement that goes beyond donations. And they’re demanding more transparency from traditional “closed-door” institutions, including big foundations, which tend to see transparency as putting grant guidelines and allocations on a website. To grantseekers, though, transparency is being as honest as possible about how funders make decisions and on what criteria those are based.

Institutional philanthropy is one of those domains that, admittedly, is still dragging its feet in moving into this new universe. Risk averse by nature, they have hierarchies of power that are hard to shake. That’s why some of the most innovative developments in philanthropy are occurring outside the walls of the big foundations and among smaller entities such as community foundations, a group of which are involving community residents as equal partners in their grantmaking efforts.  That kind of “participatory philanthropy” is also reflected in the rise of giving circles and crowdfunding sites that allow everyone to be a philanthropist.

I’ve had the privilege of working with several foundations who’ve been willing to jump into the abyss and open their doors in ways that previously would be sacrosanct. One national funder, for example, convened all 80 of their grantees in face-to-face discussions with a facilitator (and no foundation staff in the room) to give their unvarnished feedback about the funder’s somewhat unhelpful application process and the way in which they communicated with nonprofits. What made this process distinctive is that, according to a recent study by the Grants Managers Network (Project Streamline), only 9% of foundations have these kind of in-person conversations. Only 50% of funders even want to solicit grantee/seeker feedback, and they usually do so through surveys. But this foundation went even further: It used the “data” from those gatherings to completely revamp not only its application process but the internal funding decisionmaking systems. And it’s checking in with grantees annually.

I also worked with the Case Foundation several years ago to develop one of the first national “open source” funding initiatives that went beyond asking the public to vote on the recipients to involving “real people” in every step of the process — including determining the grantmaking criteria, reviewing all proposal applications, and deciding on the winners. What made this truly transparent was that the experts/funders didn’t decide the final list of potential grantees and then ask the public to vote on them; that, instead, emerged from a bottom-up process that didn’t involve the foundation at all.

This kind of transparency is the bedrock on which new, more democratic forms of philanthropy are being built. And it’s going to require that funders of all kinds be open to exploring new ways to develop stronger partnerships with “real people” on the ground. That will mean going beyond interviewing those people for input that funders then use to make the decisions themselves. Instead, it will require more meaningful involvement of people in communities in decisions about where funds are allocated, why, and how. Asking people to vote on grant-award dollars is one way; another might be recruiting people in communities to help advise foundations in developing their grant criteria, application process, and overall programs. Foundations can also ask the public to engage in their priority-setting when they do their periodic assessments, hold occasional meetings for the public, and bring in practitioners and outsiders to brief foundation staff members on a regular basis.

Admittedly, this kind of participatory philanthropy won’t be easy to embrace for institutions that have historically been shrouded in secrecy. But it could make philanthropy more responsive, authentic, and respectful to the public it purports to serve.

Nell: One of the topics you recently took on was Bill Shore’s (and others’) argument that nonprofits need to have bolder goals. You argued that “wicked problems” require a much more complex and messy approach. To take that point even further, given the ongoing increase in wealth inequality is there a point at which the system is so broken that no intervention by the social sector will really make a difference?

Cindy: I think there may be some assumptions in your question that need more clarification. First, there’s a link made here between burgeoning income inequality and the “system.” Which system, though? Government-subsidized social programs? The political process that determines who receives that support and how much? An economic system that, some argue, will always have built into it a level of income stratification? An educational system in which those with the social and financial capital to access the “best” schools are able to access better jobs? All of these factors contribute to income inequality, which, yes, results in an extremely complex and messy issue. In turn, any attempt to “solve” (you’ll note in our article, we say “resolve” instead) these problems will be fraught with nuanced minefields.

Another interesting thing in your question is the use of the word “intervention” as singular. Wicked problems by their very nature don’t usually respond to one “best practice” or even a set of discrete interventions. As one of my co-authors, Katya Fels Smyth, notes wicked problems don’t come from somewhere; they come from somewheres. And so do the solutions, which means that all sectors and domains need to be involved.

That doesn’t mean the social sector should just give up. We always need to continue to strive toward ensuring equality, equity and opportunity—the cornerstones of our democracy. It’s become increasingly clear, however, that no one sector or set of players can do it alone. So, perhaps rather than ask what the social sector can do, why not ask whether it’s time to start seeing all sectors as equally important in addressing these kinds of thorny issues?

But I’d raise yet another, bigger question: Is there even a need to have such a bright line separating the social sector from others? What, exactly, is the social sector? If, like the government, it shut down tomorrow, what would close? Today, like it or not, what used to be a clear delineation among the various sectors has become more of a membrane, with a lot of overlap and interflow.

I think what’s increasingly needed is a balance between preserving the values and mission of nonprofits while moving toward different ways of working with a more diverse set of players to achieve the common good. That will mean recognizing that the social sector may no longer have a corner on the market of all that’s right and good in the world, nor is it the only domain that can carry out charitable, philanthropic and social change efforts. Now, it’s less about which sector is “doing good” and more about making sure that all sectors, all organizations, and all individuals have the opportunity to affect change in meaningful ways in whatever milieu it occurs.

But that doesn’t mean the social sector should just disappear or morph into some kind of fuzzy hybrid. It suggests that the sector needs to step up now and ensure that cross-collaborative, horizontal approaches to “doing good” include the lessons nonprofits have learned about the kinds of skills, strategies and leadership are required to do that effectively and successfully—no matter who’s doing it or in what sector.

That means the social sector needs to move from the kid’s table to one where organizations from all sectors meet as equal partners, all with something important to add to the mix.

And the social sector has a lot to offer. Because of their experience in tackling wicked problems like poverty, violence and discrimination, nonprofits understand that the most successful of these efforts requires cooperation, rather than competition; collaboration, rather than individual effort; and long-term commitment over fast results. Those are the traits that research has shown will be essential to the 21st century.

The key will be figuring out how to parse out the best of what the nonprofit sector epitomizes and balance that with an array of competing approaches to achieve a more balanced and fluid approach.

Photo Credit: Cindy Gibson

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The Long View on the Nonprofit Sector: An Interview with Bill Shore

Bill ShoreIn today’s Social Velocity interview, I’m talking with Bill Shore. Bill is the founder and chief executive officer of Share Our Strength, a national nonprofit working to end childhood hunger in America. He has served on the senatorial and presidential campaign staffs of former U.S. Senator Gary Hart and as chief of staff for former U.S. Senator Robert Kerrey. He is also the author of four books focused on social change, including, The Cathedral Within.

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

Nell: You’ve been on a (writing) kick lately encouraging nonprofits to make bigger, bolder goals. Which do you think comes first: bold goals or a sustainable financial model? And how are the two related?

Bill: Just as every journey aims toward a destination, every social change effort should start with a goal, bold or otherwise. A sustainable financial model, while critical, is a means to an end, not an end in and of itself. We began Share Our Strength with a financial model based more on cause-related marketing and corporate partnerships than on traditional fundraising. By leveraging the assets we’d created and delivering measurable value back to our partners, we generated significant revenues in ways that felt more sustainable. We were a grant maker to other organizations, and proud of the good work they did, but ultimately it was unsatisfying not connected to a bold goal.

Nell: The stated bold goal of Share Our Strength is to eradicate childhood hunger in America by 2015. That’s 2 years away. Will you get there? And how has your experience working toward that bold goal affected your thinking about how realistic bold goals are?

Bill: It’s a great question because a bold goal is a double edged sword. If you achieve it the market will reward you. And if you don’t it may penalize you. That’s all as it should be. But the real reason to do it is not the market or fundraising or the media, but for oneself. When you devote a lot of your life tackling tough social problems, you deserve to know whether you are moving the needle. We’ve seen the market reward Share Our Strength for simply setting the goal of ending childhood hunger by 2015. Our revenues have more than doubled, and that has fueled increased impact. We will not get all of the way to our goal by 2015. We will need more time. But we believe we will have earned it. In the states and regions where we have concentrated our resources we will have proven that childhood hunger can be eradicated. We believe that such compelling proof of concept will give us the support necessary to scale the strategy everywhere.

Nell: You have argued that nonprofits are not resource-constrained, rather that they “suffer a crisis of confidence” in investing in their own capacity. Some might argue that that’s easy for the head of a $40+ million nonprofit to say. How do you think the average nonprofit can move beyond the starvation cycle of never having enough resources?

Bill: It’s not that nonprofits are not resource constrained, it’s because almost all of them are that it is even more important to invest in their own capacity, to take a long view and be willing to trade off impact in the short-term if that impact can be multiplied dramatically in the long term. Imagine a maternal and child health clinic that serves 50 women a day and makes the decision to serve only 25 a day for 6 months so that it can invest in capacity that will enable it to serve 500 a day when the six months are up. The compelling nature of urgent human need makes that a tough decision to make, but it’s the right one if you have the confidence that more capacity will equal more impact.

Nell: Moving to bold goals necessitates a way to measure whether those goals have been achieved. Yet outcomes measurement is a very nascent practice in the nonprofit sector. How do we (or can we) get to a place where we are effectively measuring the results of both individual nonprofits and larger solutions? And who will pay for that work?

Bill: As your question suggests, measuring outcomes, and communicating what you’ve measured, comes at a price. Indeed it can be expensive, and that might mean less money devoted to program in the short-term. With few exceptions there won’t be third parties lined up to pay for it. Organizations will have to decide whether it adds to their long-term competitive strengths to invest in measuring outcomes and if it does, they should be willing to make that investment. A key task of organizational leadership is to marshal the will for these investments that don’t pay off until the long-term. The challenge is exacerbated by the fact that measurement is a still nascent practice, there won’t be common measure that can be adopted in a one-size-fits-all manner, and so each organization must wrestle to the ground the metrics that are right for their work.

Nell: What about bold philanthropy and bold government? Is it possible for those two sectors to be more bold? What would that look like and how optimistic are you that those kinds of changes are possible?

Bill: I’m confident that bolder philanthropy can lead to bolder government. Our politics currently is so polarized and paralyzed that people need to see examples of programs that work. Philanthropy can do things that government can’t do: take risks, innovate, and be closer to the people we serve. And when that all adds up to a program or service that works, it creates an even greater moral obligation on the part of the public sector, i.e. government to take what works and help scale it. Resource constraints and failures of imagination have conditioned us to pursue incremental change. But big and complex problems demand transformational change to address those problems on the scale that they exist.

Photo Credit: Share Our Strength

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10 Great Social Innovation Reads: August 2013

relaxed_reading_by_ouzo_portokali-d2zbw08It becomes increasingly obvious to me the longer I am in this space that philanthropy must change just as much, if not more, than nonprofits. And perhaps change is on the horizon, particularly with some key debates happening in the philanthropic world lately.

The biggest of which this month was the showdown between Bill Schambra and Paul Brest (among others) about whether philanthropy should be “strategic.” Add to that the on-going discussion Peter Buffett started last month about philanthropy as “conscience laundering,” and the growing drum beat against the nonprofit overhead ratio, and August was a mind-opening (I hope) month in the world of social innovation.

Below is my list of the 10 best reads in the world of social innovation in August. But please add to the list in the comments.

And you can see an expanded list by following me on Twitter, Facebook, LinkedIn, or Google+.

As always, the 10 Great Reads lists from past months are here.

  1. First up, Crystal Hayling offers some great advice for new philanthropists, but I would say her advice translates to experienced philanthropists as well. If we want to get better at solving social problems, we have to raise the bar on philanthropy.

  2. The big debate this month was about how “strategic” philanthropy should be, whether the best philanthropy comes from a community or scientific approach. Bill Schambra, from the Hudson Institute, and Hewlett folk Paul Brest and Larry Kramer went back and forth and back, and of course others chimed in. For me, the most thoughtful response was from  Scott Walter. It was an interesting debate, but I think at the end of the day they are saying roughly the same thing, with which I heartily agree, philanthropy has to get better at actually solving problems.

  3. As I mentioned last month, Peter Buffett wrote a highly provocative rant against philanthropy in July. And this month the debate raged on with some very interesting counterpoints from nonprofit leader Dan Cardinali here and from Nandita Batheja on the Idealist blog here. Buffett’s piece is certainly doing what any good writing should, provoking people to question their assumptions and think in new ways, even if they don’t fully agree.

  4. Adding to his growing opus, Bill Shore again argues that nonprofits must get bolder in their social change goals. This time Darell Hammond from KaBOOM! and Amy Celep from Community Wealth Partners join in.  But Phil Buchanan at the Center for Effective Philathropy doesn’t heartily agree.

  5. More and more data points to the fact that women are becoming a major philanthropic force. It will be interesting to see how they change the face of philanthropy as we know it.

  6. It’s always important to get a different perspective, and Brian Mittendorf at the Counting Charity blog provides a really interesting counterpoint analysis to recent concerns about the Clinton Foundation’s financial management.

  7. I have to admit it, I LOVE a good contrarian, and Arik Hesseldahl is one this month with his great post suggesting that there may be too much hype around Big Data (the idea that the enormous amount of data now available could yield tremendous improvements to the world as we know it). Although he is talking about Big Data’s promise for business and government, there is an equal amount of hype around what Big Data can do to solve social problems. As with everything, there is no magic bullet, so we would do well to understand Big Data’s limitations.

  8. There is much work to be done bringing the “old” world of philanthropy together with the “new” world of impact investing, so I love to see the two at work together, like Nonprofit Finance Fund’s new project helping the Maine Community Foundation launch an impact investing program.

  9. And then there was something completely different. If we are to ensure that the next generation cares as much, if not more, about fixing social issues, we must raise compassionate children, which gets harder to do in an increasingly segmented society. Perla Ni offers 5 ways to Raise a Compassionate Child In the Age of Entitlement.

  10. And lest we forget why we do this social change work, April Greene from Idealist reminds us.

Photo credit: ouzo-portokali

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10 Great Social Innovation Reads: July 2013

10 Great Social Innovation ReadsSince I was out of the office for part of July and checked out of social media (which I highly recommend!), the below list is in no way comprehensive. But it is what caught my eye in the world of social innovation in July (when I was paying attention). More than ever, please add what I missed in the comments below.

And, as always, you can see more of what caught my eye by following me on Twitter, Facebook, LinkedIn, or Google+.

You can see the 10 Great Reads lists from past months here.

  1. In a highly provocative op-ed, Peter Buffett, son of Warren Buffett, wrote a pretty scathing rant against today’s philanthropy, calling it “conscience laundering — feeling better about accumulating more than any one person could possibly need to live on by sprinkling a little around as an act of charity.” Needless to say, much argument followed, including Howard Husock’s post arguing that Buffett is “far too pessimistic about what philanthropy, well-conceived, can accomplish.”

  2. Dan Cardinali, CEO of Communities in Schools and an emerging voice on the importance of measuring nonprofit outcomes, wrote a third piece in his series on redefining the nonprofit sector. This one explores the need for nonprofits to “hold ourselves accountable to objective measures and quantifiable outcomes.”

  3. And another nonprofit leader trying to shake things up, Bill Shore of Share Our Strength, offers the provocative “We Just Don’t Have the Money, and Other Fibs We Tell Ourselves“.

  4. Antony Bugg-Levine from the Nonprofit Finance Fund provides additional fodder to the conversation with his post “Navigating Tough Trade-offs in the Era of Scarcity.”

  5. Lucy Bernholz, philanthropy truth teller and future seer, offers three ways we can reinvent philanthropy in this great, short video brain dump.

  6. Kathleen Enright, CEO of Grantmakers for Effective Organizations, talks with Paul Carttar, former Director of the Social Innovation Fund, about what he learned there. It remains to be seen what impact the Social Innovation Fund will have, but as Paul says, government can and must play a role in social innovation, “The challenge for everybody — for government and for philanthropy — is to understand what each has to offer.”

  7. The New York Times uses Think Impact (which encourages entrepreneurship in third world communities) to provide an interesting case study of the dilemma of deciding whether to be a for-profit or nonprofit social change organization.

  8. Ever provocative, Phil Buchanan from the Center for Effective Philanthropy argues that the approach MBA programs take in teaching philanthropy “denies the reality that nonprofits and philanthropy work to address the problems that have defied markets…and, in many cases, are a result of market failure.”

  9. Writing on the Pioneers Post blog, Jeremy Nicholls takes issue with the word “impact” and encourages us to think about “value” instead.

  10. The National Committee on Responsive Philanthropy found that in 2011 American foundations increased unrestricted giving by 50% (from 16% of all grant dollars going to support general operating in 2010 to 24% in 2011). Now that’s an exciting trend!

Photo Credit: josue64

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From Nonprofit Scarcity to Social Change Abundance

nasa celebratesBill Shore, founder of Share Our Strength, a nonprofit aimed at ending childhood hunger in America, wrote a really interesting post recently. He argues that nonprofits must be more bold, that the risk aversion that defines the sector is itself holding nonprofits back from creating change.

Shore encourages nonprofit leaders to figure out exactly what they are trying to accomplish:

Nonprofit organizations would be well served to step back from the day-to-day operations and ask themselves what success means, how will they know when they have accomplished their mission, and how will they measure it along the way. It sounds like common sense, but almost no one does it, in part because it’s so hard to do. But if you answer those questions with precision and clarity, and articulate the goal you hope to achieve, everything else falls into place.

And Bill is not alone in making this charge to the nonprofit sector. The Case Foundation, founded by Steve and Jean Case who made millions from AOL, has made its focus getting nonprofits to be more bold, to Be Fearless.

But if we are going to ask nonprofits to think bigger we have to address the elephant in the room: money. Nonprofit leaders often put themselves in a vicious cycle of thinking they don’t have enough money to be risky, so they don’t create ambitious goals, and then their lack of ambition impedes greater outside investment.

It is in fact the very act of being bold that inspires action and investment, that marshals resources to do the impossible. The most obvious example is John F. Kennedy’s 1962 charge to “to go to the moon in this decade.” At the time, the goal he set was crazy. NASA had no idea how they were going to make that happen, and they were already behind the Russian space program. But the very fact that the goal was set, and set so publicly, was inspiring.  That simple act of inspiration moved people, money, resources. And Kennedy’s goal came to fruition in July of 1969. The impossible became possible simply because he set a goal.

Often nonprofit leaders are hesitant to set a bold goal because they know they currently don’t have the money, staff, relationships to make it happen. They don’t want to set a goal whose execution is not readily evident. So often nonprofit leaders start from a point of scarcity. They ask the question:

“How much can we accomplish with what we can raise?”

Instead, nonprofit leaders need to start asking the question:

“How much should we raise to accomplish our goals?”

It may seem like semantics, but I believe the distinction is profound. Instead of money holding you back, money becomes a tool to employ in accomplishing something much bigger. If you start by setting bold goals about what change you want to create, that very act, the act of putting a stake in the sand, can inspire. And that inspiration can attract the things you need to make your goal a reality.

In order to set bold goals, nonprofit leaders need to remember why they started their organization in the first place and why they continue to come to work each day. What is that passionate resolve that keeps you going every day? Why are you pouring your heart and soul into the work? What ultimately are you trying to change about the world we live in?

Start there. Create your bold goal from that place. Remove the obstacle of not having enough and watch how you suddenly have more than you could have ever imagined. That’s where real change begins.

Photo Credit: Mission Controls celebrates the moon landing, NASA.

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Doing Good Work is No Longer Enough

There is an increasing drumbeat in the world of social change that nonprofits must start measuring their work. Thought leaders like Mario Morino with Leap of Reason, Bill Shore’s recent blog post “What Does Success Look Like?” and David Henderson’s (recently interviewed on the Social Velocity blog here) ongoing Full Contact Philanthropy blog, to name a few, are adding to the chorus.

The argument among thought leaders, funders, raters and others in the social change sector is increasingly that nonprofits MUST:

  1. Figure out what they exist to do (a theory of change)
  2. Create a disciplined operational model for creating that change
  3. Measure whether the change is actually happening
  4. Articulate that change in order to garner more support

But all of this is fairly new to the nonprofit sector and not yet widely practiced (by a long shot). In fact, some of these ideas are still quite controversial. Let’s take #2 for example, “Creating a disciplined operational model.” David Henderson analyzes this well in his post last week. Although David gets a little bogged down in jargon, his idea is a really great, but probably touchy, one.

He argues that nonprofits must become more discerning and disciplined about who they provide service to. Because nonprofits have limited resources, they cannot serve everyone. Therefore instead of serving people on a first come first served basis (which is the norm), they should instead serve those who they can best help. In other words, they should determine and then serve those populations of people who will benefit the most from their intervention:

In the case of the youth workforce development program, while all low-income youth would qualify for services, we might have a preference for placing people into the program who are likely to complete the internship. In this case, one could use historical data to fit a predictive model that provides some insight into what characteristics made an individual more or less likely to have completed the program in the past. Under this framework, social welfare maximization would involve not only placing people into the program, but maximizing the number of people in the program who complete the internship.

The idea is that instead of filling up the program with any youth who have a need, the nonprofit would create more social change by thoughtfully selecting types of children on whom they could have the most impact.

To the nonprofit world, which is very much focused on trying to help as many people as possible, this is a potentially radical idea. But if smartly employed, nonprofits could actually provide more social change through this disciplined method. And in an increasingly resource-constrained environment, it makes sense for nonprofits to want to get the highest return on their program resources.

In order to take this approach, however, nonprofits must have a theory of change. You cannot create social change if you don’t:

  • Know what you want that change to be, and
  • Measure whether that change is happening

In an increasingly competitive marketplace, it is getting harder and harder for nonprofits to attract support. The harsh reality is that those nonprofits that develop a smart theory of change, measure whether that change is happening, and then articulate the change to supporters will increasingly be the ones that survive. Not to mention that they will be the ones that actually create social change.

Photo Credit: Colin Smith

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