The news lately has been less than inspiring. The census data released yesterday reports that the economy may be worse than we thought, with 15% of Americans in poverty, and the median income decreasing. After an almost 3-year recession that followed two wars and the 9/11 terrorist attacks, I sometimes dwell on the fact that my oldest son, who will turn 10 in November, has grown up in an era of nearly constant uncertainty and fear. But instead of wallowing in these dreary days, we must find in ourselves, and particularly in those working toward social change, the will and determination to lead ourselves, our organizations, our communities away from despair.
These times require leaders who face the uncertainty with optimism, innovation and sheer willpower. And I don’t mean government leaders, although that would be nice for a change. I mean the leaders of even the smallest social change organization. In many ways, I believe it is up to the nonprofit sector and the countless organizations and funders that make up that great sector, to face, rather than shrink away from, the many challenges facing our country. It is so easy to become overwhelmed by the big challenges and the littler ones. And the leaders of our nonprofit sector are already so worn down by continuously being forced to do more and more with less and less.
But when the constant barrage of bad news gets me down, and I struggle to understand what my son’s life will be when he is my age, I think of a blog post that Kjerstin Erickson wrote on Martin Luther King day 2010. Kjerstin is the executive director of FORGE, a nonprofit working in African refuge camps. In writing her post, she was overwhelmed by the devastation following the Haiti earthquake and struggled to return to the optimism that a social change leader must have:
For a few days, I admittedly found myself struggling with the question of whether the change I’m seeking is even pragmatically possible. I asked myself what all the struggle is for if it can all come crashing down in an ugly testimony to our global shortsightedness. In the midst of the shame and grief, I even asked myself if I may be happier by not even trying. In this world of optimism and change, those thoughts are sacrilege. And yet, we’ve all found ourselves in moments like these. It’s part of the process of reconciling the world we want with the world we live in.
Because, in reality, if you are a leader working towards fundamental change to a social problem you must be inherently optimistic. The beliefs that a better world is possible and that you can do something to make it happen are, by definition, optimistic ones. But Kjerstin, like so many working for a better world, has moments of deep despair when confronted with a growing and seemingly insurmountable list of problems.
However, for Kjerstin, and other leaders driving social change, it is untenable to remain in the grips of despair. It is up to those leaders like Kjerstin who have envisioned a world without poverty, or homelessness, or uninsured children, or crumbling schools to face the bad news head on, dust themselves off, and find inspiration wherever they can. Kjerstin’s inspiration came from the words of a great leader who came before her, Martin Luther King, Jr:
When our days become dreary with low hovering clouds of despair, and when our nights become darker than a thousand midnights, let us remember that there is a creative force in this universe, working to pull down the gigantic mountains of evil, a power that is able to make a way out of no way and transform dark yesterdays into bright tomorrows. Let us realize the arc of the moral universe is long but it bends toward justice.
Now more than ever we need leaders who can point the way to brighter times ahead. And those leaders, that inspiration, I believe comes from the army of people leading social change: the inherently optimistic, passionate, driven, determined leaders who have never been content to sit idly by and watch problems go unsolved. They are the visionaries who believe, who have always believed, that there is still hope, that we can make something out of this mess. It is up to them to show us the way.
Photo Credit: kekecpp
I’m back from Spring break, which came right as the flurry of discussion about my blog post The Critical Alignment of Mission, Money and Competence was winding down. I really appreciate the great comments and discussion from Sean Stannard-Stockton (of the Tactical Philanthropy blog), Nathaniel Whittemore (of Change.org’s Social Entrepreneurship blog), Kjerstin Erickson (founder of FORGE) and Sasha Dichter (Director of Business Development for Acumen Fund), among others.
The great discussion happened and was then picked up by others (such as the Social Capital Markets blog, and the Nonprofit Assistance Fund blog) and taken further by others (Sasha kept going) because of our good friend, Twitter. For all the jokes and rolled eyes, Twitter has a tremendous amount of value. The discussion itself didn’t happen on Twitter, 140 characters can only do so much. But rather, it created a space for a thoughtful discussion about a topic that seems to be of interest to many in the social innovation space, among people who otherwise would not have connected, let alone been able to have a conversation of such depth.
I’m a fairly recent convert to Twitter (aren’t we all?) and at times it can feel like an albatross (one more thing on my very long list of things to keep up with), but if you can keep up with it, even just marginally, it can hold tremendous value. (You can follow me on Twitter @nedgington).
But what came out of this great discussion? What were the takeaways? I’m sure the battle rages on, but for me, the key points were:
- Although mission, money and core competencies must be in equal alignment in a nonprofit organization, funding must mold to mission, not vice versa.
- A sustainable revenue stream is one that is sustainable not because it is based on sale of goods or services (“earned income” is often used interchangeably with “sustainable revenue stream”, which I, like Sasha, really disagree with) but because it is based on a funding mix (whatever that may be) that can be counted on for years down the road.
- Finding a sustainable revenue engine is often about creating a context or a “market” for your work.
- Nonprofits have to be more analytical about their funding sources and how sustainable, and aligned with their mission and core competencies, they are and will continue to be.
- The funding community is best positioned to help with revenue misalignments.
I’m sure nothing was changed by this discussion. But the more that these kinds of discussions happen and the more that some of the assumptions of nonprofit operation and finance are challenged the more apt we are to restructure how nonprofits work so that great missions with great delivery can become sustainable.
This is a (perhaps) final update to my earlier posts here and here about FORGE, a nonprofit working in African refugee camps to promote peace and stability but that is struggling to stay afloat. Curtis Chang the consultant from Consulting Within Reach who Sean Stannard-Stockton, of Tactical Philanthropy, asked to provide an analysis of what it would take to turn FORGE around has submitted his final report. And because of this final report, and Sean’s own discussions with FORGE’s Executive Director Kjerstin Erickson, Sean has been convinced that FORGE is a worthy endeavor and has made his own $1,000 contribution. His decision to invest, however, was not purely based on FORGE’s work or their potential to turn things around. Rather, Sean based much of his decision on his appreciation of FORGE’s “radical transparency:”
It is incredibly important that we build more trust within philanthropy. It is incredibly important that we move away from soliciting donations via a “sales pitch” and shift it towards a process of making a well reasoned argument centered on impact potential. FORGE hasn’t sugared coated things for us. They haven’t pushed pictures of the refugees they help at us. They’ve explained their situation, made a well reasoned argument for why they think they deserve funding and they’ve openly accepted any and all criticism with grace and humility. FORGE gets my money.
In fact, FORGE has raised half of their $100K deficit for this year. So, perhaps they are on their way.
I have my doubts, however. In Curtis’ report he details a needed major overhaul of FORGE’s board, their infrastructure and their overall fundraising function. FORGE’s board lacks refugee expertise and the network and capacity to raise funds from individual donors. Curtis also points out that FORGE has little hope of raising money from foundations, corporations or governments. That leaves individual contributions. However, he points out that FORGE currently lacks a board that can help with that, a donor database and cultivation system, fundraising expertise and a network. Those seem like some pretty huge hurdles to me. So what is the plan to overcome them?
It seems to me the biggest roadblocks facing great social entrepreneurs like Kjerstin (and I do think she is a great social entrepreneur because she pairs vision with action) are the capital and strategic management expertise necessary to scale and become sustainable. Lack of transparency in the social sector is not a major hurdle. It would be great if we had more transparency in the social sector, and the financial sector as well, for that matter. But transparency is not what is holding organizations like FORGE back, and it is not what will turn them around. There needs to be major changes in the way resources flow to organizations and models that are really making a difference and creating positive outcomes. And these resources are not limited to just financial ones, they also include strategic expertise about how to create a viable business model, how to plan for and achieve sustainable growth, how to create a sustainable revenue engine and so on. We can’t expect our social entrepreneurs to be able to do it all on their own. And we can’t simply reward them for sharing their lack of expertise or the hurdles that they encounter. We need to provide the resources they need to bring their ideas to fruition in a sustainable way.
In an update to my earlier post about FORGE, a nonprofit working with refugees in African camps to promote peace and social stability, there has been a lot of activity trying to save the organization. Some donors have stepped up and a few consultants have come forward to try to revamp their fundraising and marketing efforts. It remains to be seen whether these efforts will save the organization, but the discussions have been very interesting.
Curtis Chang, CEO of Consulting Within Reach, a San Francisco nonprofit consulting company, is working with FORGE to turn their fundraising around. He has written a really interesting post on Social Edge about how FORGE’s attempt to take the Kiva model of online microfinance and turn it into a fundraising model was fundamentally flawed. If you recall from my earlier post, FORGE’s original funding model had student volunteers responsible for fundraising for the programs they created. Earlier this year, FORGE scrapped that model and moved their fundraising to an online giving program where donors could pick projects to support. The new model has been a flop, and FORGE is $100,000 in the hole.
Curtis argues that a funding model needs to be built around the organization’s soul: what it is that they are about and do best:
A nonprofit’s funding model is not just a purely tactical decision to maximize revenue. Its strengths or flaws can’t be just the product of marketing. And the coolest website can be soulless. A fundraising model works best when it is a natural extension of the essential qualities of an organization: its founding characters, narrative, relationship to its audience – all that makes a great…story.
Its archetypical story is of Kjerstin Erickson as a 20 year old junior dropping out of Stanford to go work in refugee camps. She rallies other college students to the cause. Soon, FORGE is filled with other young, idealistic college students doing the same – and raising some key operational funds to keep FORGE growing.
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