I’m really excited to announce that I will be doing something a little different on the blog next week. I am attending the Grantmakers for Effective Organizations (GEO) conference in Minneapolis May 2nd – 4th, and GEO has asked me to curate a set of bloggers to report on the conference.
I have rounded up a rockstar group of bloggers who will be sharing their insights from the conference with you here on the blog. And the blog series will be reposted to the Minnesota Council on Foundations blog, which is a co-host of the conference.
GEO is made up of 500 member grantmakers who are working to reshape the way philanthropy operates and promote strategies and practices that contribute to grantee success.
The GEO conference is held every other year and brings together philanthropic leaders from across the country who all share a common vision for advancing smarter grantmaking practices that enable nonprofits to grow stronger and more effective.
Some of the sessions in this year’s conference that I am particularly excited about include: “Can Foundations Help Grantees Build Fundraising Capacity?,” “Real Costs, Real Outcomes. What Funders Need to Know,” and “Supporting Leadership Development in Social Justice Organizations.” In addition, there will be some really interesting plenary sessions about things like culture in philanthropy and philanthropy’s role in overcoming inequity.
It promises to be a fascinating conference.
So, starting next Tuesday, May 3rd you’ll be hearing from this great group of guest bloggers:
Phil Buchanan, President of The Center for Effective Philanthropy
Phil is a passionate advocate for the importance of philanthropy and the nonprofit sector and deeply committed to the cause of helping foundations to maximize their impact. Hired in 2001 as CEP’s first chief executive, Phil has led the growth of CEP into the leading provider of data and insight on foundation effectiveness. CEP has been widely credited with bringing the voice of grantees and other stakeholders into the foundation boardroom and with contributing to an increased emphasis on clear goals, coherent strategies, disciplined implementation, and relevant performance indicators as the necessary ingredients to maximize foundation effectiveness and impact. Phil is no stranger to the Social Velocity blog — I interviewed him here, and he guest blogged last summer here.
Trista Harris, President of The Minnesota Council on Foundations
In her role at MCF, Trista helps award more than $1 billion annually. Prior to joining MCF in August 2013, she was executive director of the Headwaters Foundation for Justice in Minneapolis, and she previously served as program officer at Minnesota Philanthropy Partners. Trista earned her master’s of public policy degree from the Humphrey Institute of Public Affairs, University of Minnesota, and her bachelor of arts from Howard University, Washington, D.C. She is a passionate national advocate for the social sector using the tools of futurism to solve our communities’ most pressing challenges and is a member of the trends in family philanthropy task force for the National Committee for Family Philanthropy.
Mae Hong, Vice President of Rockefeller Philanthropy Advisors
Mae is responsible for building RPA’s presence in serving individual donors, foundations and corporations throughout the Midwest. Bringing 18 years of nonprofit and philanthropy experience to RPA, she previously served as Program Director at the Field Foundation of Illinois. Mae actively participates in local and national philanthropic associations and networks, serving in leadership roles on committees, engaging in public speaking opportunities, and facilitating planning and execution of philanthropic initiatives. She currently serves on the boards of GEO, the Illinois Humanities Council and the Daystar Center. She is a past chair of the board of Chicago Foundation for Women.
And once the conference is over, I will plan to do a wrap-up blog post on my thoughts and insights from the conference.
If you plan to be at the conference, please let me know, I’d love to see you there! And if you can’t make the conference but want to follow the content from afar, follow the Twitter feed at #2016GEO.
Note: I was asked by The Center for Effective Philanthropy to review their latest research report, Sharing What Matters: Perspectives on Foundation Transparency, released in late February, and provide my thoughts about it for their on-going blog series on the report. Below is my post which originally appeared on the CEP blog.
Sharing What Matters: Perspectives on Foundation Transparency provides some startling data about the state of transparency in the foundation world.
While for the most part, foundation leaders recognize the importance of transparency and are trying to be more transparent, the report shows there is still much work to do.
To me, this question of foundation transparency is part of the larger, ever-present power imbalance in the nonprofit sector between those with money (funders), and those who seek that money (nonprofits). Funders often encourage nonprofits to be transparent about their results and when they have succeeded or failed. But it appears that in these two areas (results and lessons learned), funders are less transparent than either their grantees want them to be, or they would like themselves to be.
This is all critically important because a more transparent philanthropic sector — particularly if foundations were more transparent about how they assess their results and what has worked and what hasn’t — could mean more money flowing to more social change.
CEP’s report delineates two levels of foundation transparency. First is transparency about grantmaking: who leads the foundation, how they have made grants in the past, how they make decisions. The second is transparency about the results foundations themselves achieve: how they assess the performance of their investments, how they share successes and failures.
This second (and I would argue much more interesting) level of transparency is about foundations reporting the very thing they are often asking nonprofits to report: their performance.
In particular, the research uncovers three stark disconnects:
- Foundations Don’t Share How They Assess Their Performance
Of the foundation leaders surveyed, 61 percent said they believe being transparent about how their foundation assesses its performance could increase effectiveness to a significant extent. Yet, only 35 percent of foundations reported actually being very or extremely transparent about it.
- Foundations Aren’t Transparent about Successes and Failures
While 69 percent of foundation leaders think that being transparent about what’s worked in their grantmaking could increase their effectiveness, only 46 percent report being very or extremely transparent about what’s worked. And transparency about what hasn’t worked is even worse. 30 percent of foundation leaders say their foundations are very or extremely transparent about what does not work, which makes failures the lowest-rated area of foundation transparency. And nonprofits agree that foundation transparency is lowest when it comes to sharing what hasn’t worked.
- Foundations Want to Be More Transparent, But Aren’t
While 94 percent of foundation leaders surveyed say that increased transparency is a medium or high priority at their foundation, 75 percent of foundation leaders say that their current levels of transparency are not sufficient. And shockingly, 24 percent of foundation leaders say that nothing limits their ability to be more transparent. So it’s a big priority, yet it’s not getting done.
The report suggests some reasons why transparency about performance and lessons learned is recognized as important, but still far from ubiquitous in the philanthropic sector:
- Lack of Strategy: Foundations aren’t creating clear enough goals around which they can actually assess their performance.
- Lack of Capacity for Evaluation: Foundations aren’t allocating enough resources to assessing their performance.
- Fear of Diminished Reputation: Foundations are afraid of harming their own or their grantees’ reputations by revealing what has or hasn’t worked.
Surprisingly (or maybe not so surprisingly), these impediments to foundation transparency mimic the hurdles nonprofits find (or place) in their own way. Nonprofits often pour as much money as possible into programs and skimp on investing in organization-building efforts like strategy and evaluation. This bias against organization-building is often encouraged (or demanded) by their funders. And so it appears that funders put these same hurdles in their own way. Perhaps foundations, just like their nonprofit grantees, need to acknowledge that with sufficient investments in smart strategy and performance evaluation, greater results can be achieved.
The third and final impediment to foundation transparency about performance and lessons learned is trickier. Fear of harming the reputations of their grantees by sharing lessons learned is a real issue. Foundations tend to invest in packs. So if a foundation reveals investments that have failed, there is a risk that other foundations will flee.
But if we truly want to move to a place where more resources flow to what works, don’t we have to be more transparent about what worked and what didn’t work? If a foundation investment failed because of the foundation’s shortcomings (the investment didn’t fit with foundation goals, the foundation didn’t invest enough, or it didn’t invest in capacity as well as programs), the foundation (and other foundations learning from these lessons) could learn to become more effective investors. And if the investment didn’t work simply because it was the wrong intervention, then isn’t it better to move investments to interventions that do work? Fear can be a debilitating thing, and for the sake of greater results, I think both foundations and their nonprofit grantees must work to overcome it.
Ultimately, the CEP report is hopeful. It uncovers a desire among both foundation leaders and their grantees to move from a basic level of transparency toward a deeper (and more important) one that reveals performance and lessons learned.
Let’s hope that this stated desire for a change in foundation transparency, and the requisite changes in how foundations invest in strategy and performance assessment and overcome fear, becomes reality.
Photo Credit: The Center for Effective Philanthropy
The Evelyn and Walter Haas, Jr. Fund, a foundation on the forefront of investing in nonprofit capacity and one of the few foundations funding nonprofit leadership development, released a new report this week Beyond Fundraising: What Does It Mean to Build a Culture of Philanthropy?.
While I applaud the Haas Fund for taking a pioneering interest in, as they put it, “understanding how to break out of the nonprofit sector’s chronic fundraising challenges,” unfortunately I don’t think that this report will move the needle on the sector’s money woes.
Their landmark 2013 report published with CompassPoint, UnderDeveloped: A National Study of Challenges Facing Nonprofit Fundraising (of which the Beyond Fundraising report is a follow up) uncovered a real crisis in fundraising staffing in the nonprofit sector. And last year Haas announced a multi-year effort to “to identify gaps that may need to be filled when it comes to helping nonprofits break out of chronic fundraising challenges.”
A sector-wide conversation about money is so incredibly needed that I really appreciate the Haas Fund’s efforts to start it, especially when philanthropists are loathe to talk about the sector’s money challenges, let alone invest in solving them.
But in the hope that debate spurs greater change, and because of Haas’ expressed desire to open a conversation so that they can “learn out loud,” I offer my concerns about the Beyond Fundraising report.
As Linda Wood, Senior Director of Leadership Initiatives at the Haas Fund (and past interviewee on this blog), describes in the beginning of the Beyond Fundraising report, there must be a fundamental change in how nonprofits approach fundraising. As she writes: “Without a deeper shift in how organizations hold the work of fund development, simply adopting new tools and techniques may not be enough.”
The Beyond Fundraising report, authored by philanthropy consultant Cynthia Gibson (also a past interviewee on this blog), starts from where the 2013 UnderDeveloped report left off: that the lack of a culture of philanthropy is the most important issue holding nonprofits back from fundraising success:
By framing the issue as a talent pool problem alone, we neglect to focus more critically upon entrenched organizational factors that contribute to the inability to establish development as a shared function and nurture an organizational culture to sustain it. The right development director hire alone will never break the cycle, but the right person inside an organization that has a culture of philanthropy, can.
The Beyond Fundraising report is an attempt to understand what a culture of philanthropy is and how to encourage its growth. The report defines a “culture of philanthropy” as a situation in a nonprofit where:
Most people in the organization (across positions) act as ambassadors and engage in relationship-building. Everyone
promotes philanthropy and can articulate a case for giving. Fund development is viewed and valued as a missionaligned program of the organization. Organizational systems are established to support donors. The executive director is committed and personally involved in fundraising.
The report delineates four necessary components to a culture of philanthropy:
- Shared responsibility for development
- Integration and alignment with mission
- A focus on fundraising as engagement
- Strong donor relationships
It then provides a list of indicators for nonprofit leaders to use to assess whether or not they possess a culture of philanthropy, a list of “guiding questions” nonprofit leadership can ask in order to build a culture of philanthropy, and a list of roles that development staff and funders can play in bringing a culture of philanthropy to fruition.
While I don’t disagree with any of the indicators, questions, or roles the report describes, I don’t think that any of them, or even their sum total, will solve the lack of financial sustainability at a particular nonprofit, let alone in the nonprofit sector overall.
And this is because I think that only looking at fundraising — the pursuit of philanthropic dollars, which only make up 13% of all the money flowing to the nonprofit sector — is a fundamentally flawed approach to understanding money in the sector. My bias has always been to move the sector from a broken fundraising approach to a more strategic and holistic financing approach.
And while I agree that individual nonprofit leaders are part of the problem, they are just one part. Often their troubled approach to money is simply a reaction to a dysfunctional system. Certainly we need to move away from some ineffective money practices that nonprofit leaders embrace (being reactive rather than strategic about money, not calculating the return on investment of fundraising activities, not aligning money and mission, allowing a board to dismiss their money-raising responsibilities…).
But I worry that by scapegoating the problem to the shortcomings of individual nonprofits we are ignoring the larger financial dysfunctions of the sector. Rather than pull back the curtain on the systemic hurdles causing the nonprofit sector’s money woes, I fear that this report lays much of the blame for financial dysfunction at the feet of individual nonprofit leaders.
Because in my mind, the real problem is not the approach of individual nonprofit leaders, although that is important. I think the financial problems of the nonprofit sector run much deeper. If we truly want to address those problems we must have bigger conversations, and ask harder questions, like:
- Why is there a lack of financial acumen (how to effectively attract and employ money) throughout the sector (present among both nonprofits and their funders), and how do we solve that?
- Why is long-term organizational and financial planning not encouraged and supported throughout the sector?
- Why is there not enough investment in the financial function of nonprofit organizations (the staffing, systems, technology, planning, and marketing necessary to build sustainable financial models)?
- Why aren’t there many, many more funders like The Haas Fund discussing and investing in solutions to the sector’s money problems?
- Why are we still focusing on philanthropic dollars alone when we need to understand and integrate money as a whole into social change efforts?
And that’s just a start.
My fear is that if we place the full weight of nonprofit financial dysfunction on the shoulders of an individual nonprofit’s culture, or if we look only at fundraising, we shirk our duty to dig deeper and remedy larger, structural dysfunctions in the sector.
I applaud the Haas Fund for their determination and courage to create a space, through their capacity investments and on-going research, for the incredibly important conversation about money in the nonprofit sector. But I would love to see this effort grow to become a bigger conversation about how we solve the endemic financial challenges nonprofits face.
Photo Credit: The Evelyn & Walter Haas, Jr. Fund
In today’s Social Velocity interview I’m very excited to be talking with the co-founders and editors of the new History of Philanthropy blog: Benjamin Soskis, Stanley Katz, and Maribel Morey.
The HistPhil blog launched this past June and focuses on how history can shed light on current philanthropic issues and practice.
Because how can we hope to create social change without understanding the results of efforts that came before us?
Ben, Stanley, and Maribel are all academics with specialities related to history and philanthropy. Stanley is on faculty at Princeton’s Woodrow Wilson School and has also taught at Harvard, Wisconsin and Chicago. Benjamin is a Fellow at the Center for Nonprofit Management, Philanthropy and Policy at George Mason University and a consultant for the history of philanthropy program of the Open Philanthropy Project. And Maribel is a professor of history at Clemson University and is currently writing a book, From Tuskegee to Myrdal, which describes how and why white Americans in big philanthropy transformed from proponents of segregated education to advocates of racial equality.
Nell: Stanley, you write, in your inaugural post for the HistPhil blog, about the tendency of philanthropy to get swept up in “new” approaches that actually aren’t all that new. Is there really anything new in philanthropy right now? Are there any structural or cultural developments or approaches in philanthropy that are significantly different than in the past?
Stanley: It is hard to separate rhetoric from reality in the current environment of philanthropic hype. From my perspective, the current boasting that all is new in philanthropy (see the recent New York Times “Giving” section), is pretty uninformed (naïve?).
One of the most common claims, repeated frequently in the New York Times piece, is that philanthropists are no longer simply trying to alleviate the “symptoms” of distress, but in fact are aiming to remove the underlying causes of social and physical problems. This attempts to distinguish what the large foundations are doing from what the traditional foundations did in the 20th century (and of course no one is making this claim more loudly than Judith Rodin of the “new” Rockefeller Foundation.)
But the emphasis on the elimination of problems by identifying their root causes was the innovative claim of the founders of the first American foundations, best articulated by Andrew Carnegie and John D. Rockefeller, Sr. So from this point of view there is not much new in the current aims of big philanthropy.
But what is actually new, and there is a lot that is new, is the determined focus on short-term, measurable, results — this is the mantra of the genuinely new “strategic” philanthropy. The older foundations of course aimed to be effective, but they defined effectiveness much more loosely and measured it less precisely than current large foundations. This is an enormousdly important attribute of the current mega-foundations, and all the other foundations that have jumped on the “strategic philanthropy” bandwagon.
The current foundation rhetoric also makes use of a wide range of business metaphors, none more important than the notion that philanthropy is best thought of as “investment” in change, and frequently characterized, using the language of hedge funds, as “bets” on successfully producing change. Much of the current language of philanthropy is drawn from venture capital activity, and the new philanthropy can also be thought of as “venture” philanthropy. This is a new attitude.
The original philanthropists knew they were adapting the then modern techniques of business organization and management to their grantmaking, but they thought of philanthropy as different from business. That distinction seems to have eluded much of the current generation of philanthropists.
But I need to say that I am a little uncomfortable with these large generalizations, since not all current philanthropists speak or act as I have just suggested — nor did the earliest generation of philanthropists. But there is something new in the philanthropic air. The question is whether that air is as salubrious as its current advocates claim.
Nell: Stanley, philanthropy got its modern day start in the missionary work of Europeans and Americans in third world countries. What, if any, parallels do you see in philanthropic work in developing parts of the world today?
Stanley: Here the important fact is that the Rockefellers (John D. Sr. and Jr.) originally intended the Rockefeller Foundation to be a missionary foundation, operating mostly (possibly entirely) in China. For a variety of reasons, in particular the influence of their advisor Frederick T. Gates (a minister who had turned in a secular direction), they abandoned the missionary focus in favor of a secular focus. Their work in China, and especially the founding and support of the Peking Union Medical School, continued to have a missionary flavor, but their work in Africa and other tropical areas was more early medical philanthropy than missionary philanthropy. They turned to the eradication of tropical diseases both because they were attractive to current medical research capacity, and because it was politically safe to engage in medical experimentation abroad — a lesson that Big Pharma learned from them later in the century.
But the emphasis of the large foundations, beginning in the 1960s, with grant-making in the underdeveloped world, was quite different, and unrelated to any neo-missionary instinct. Many of the large American foundations at mid-century thought they could assist the process of decolonization and local self-determination by supporting a wide range of development activities in what was then called the Third World. They later came to be attacked by neo-Marxists for allegedly supporting US and Western imperialism in the developing world, but that is a big subject all in itself.
Ironically, there is now a burgeoning effort by American evangelical business people to invest in private development projects, especially in East Africa, and this is a throw-back of sorts to much earlier notions of philanthropic support of development. But it needs to be contrasted with the massive Gates Foundation public health efforts in Africa and elsewhere — an effort purely “strategic” in its inspiration.
Nell: Ben, historically, philanthropic giving has not grown above 2% of US GDP, why do you think that is and do you think there is any hope of changing that?
Ben: The answer to the 2% conundrum is the holy grail of the nonprofit sector, and I don’t pretend to have any certain answer about it myself. It’s worth noting, though, that 2% of GDP is still pretty good relative to other developed countries (in fact, by many measures, it’s one of the best rates). But it’s still confounding why it hasn’t budged for more than four decades. There’s obviously a tangle of causal factors at play, and I’ll just offer a few possibilities that have occurred to me in the course of my research, without making any claims that this is an exhaustive list.
Given the persistence of that rate, it makes sense to look for some equally persistent characteristic of the American nonprofit sector that has also remained unchanged over that long timespan. A recent article in the Chronicle of Philanthropy can give us a clue to a possible candidate. As part of their Philanthropy 400 ranking of the nation’s largest nonprofits, they note how little the list has changed from when it was first tallied in 1991 (especially when compared with the churning of the list of the largest for-profit companies). In part by dint of habit, and in part because of the power of the institution’s “brands,” Americans have tended to stick with a handful of large charities—through scandals, evolving social needs and changing fads.
As I pointed out to the Chronicle reporter (though my observations got a bit lost in translation; Josephine Shaw Lowell, a founder of the American charity organization movement, wouldn’t have suggested that bigger is better, only that a degree of centralization in charity administration was necessary), we can trace this development back to the turn of the last century, when charity reformers instituted a process of centralized, bureaucratized and professionalized giving. That is, from the late 19th century-scientific charity movement onward, individuals were warned that their disparate giving was too often haphazard, scattered, wasteful, and overlapping, and so were encouraged to hand over the administration of charitable resources to a centralized institution. The community chests and the United Way came out of this impulse; Catholic Charities succumbed to it as well.
It’s very possible that the development toward more centralization and professional administration has bolstered American giving by providing citizens with more confidence and by making decisions about where to give easier. But I think we also have to wonder whether it imposed a sort of cap as well, since it might have removed some of the immediacy, intimacy and individuality from the charitable exchange that could push individuals to give beyond an initial comfort point (which very well might be around 2%).
The Chronicle suggests that we might see more disruption in the list in the coming years, or at least that some of the big names, like the United Way, might be ceding ground. If that is the case, and if some of the space they occupied is filled with smaller upstarts, it’s possible we might see some movement beyond 2%.
Another possible factor worth considering for the persistence of the 2% rate is the declining role of religion in determining charitable allocations. I don’t only mean that the percentage of total giving going to religious institutions has been steadily declining over the last few decades. But also that giving itself has, for many Americans, become an increasingly secular activity.
Again, we can trace this back to the early 20th century, when charity reformers sought to “secularize” giving by stripping it of any sectarian taint and endowing it with a degree of rationality; the indiscriminate giver in their rhetoric was often an easily-duped priest. But it is also possible that the religious impulse to give is more easily able to push past the equilibrium of 2% and to ask individuals to make even deeper financial commitments.
Yet another factor preventing giving from crossing that 2% barrier might be media coverage of nonprofits. As I quipped in an article on the subject in the Chronicle last March, borrowing from Woody Allen, the coverage is generally pretty weak—and the portions are too small. That is, the media grants the sector relatively little attention, and when it does, it seems to suffer from what New York Times reporter David Clay Johnson has called a “Madonna-whore” complex: alternating between feel-good human interest stories and stories focused on nonprofit abuse. But stories that chronicle the difficult and important work many nonprofits are doing on a daily basis—they just don’t have the journalistic juice to make it into print. As the former nonprofit beat reporter for The New York Times, Stephanie Strom, told me, “A nonprofit just doing good isn’t news because everyone knows nonprofits are supposed to do good.” This might be changing, with a number of important online journalistic ventures out there, but I think there is a deep deficit in public knowledge about what nonprofits are doing—and this deficit could sap the public’s willingness to give more.
You also have to combine this media deficiency with the general conceptual muddle that has emerged with the blurring of private and public lines of funding social welfare provision in the last half century. Not only do American givers and tax-payers have to contend with a federated system (to say nothing of international structures of governance), in which various jurisdictions take up differing responsibilities for addressing social ills and needs. But we also inhabit what political scientist Jacob Hacker has termed a “divided welfare state,” in which public and private lines of responsibility for social welfare are increasingly blurred. Obviously, there’s opportunity in this blurring. But as scholars such as Lester Salamon have pointed out, it also can represent a sort of existential threat to the nonprofit sector’s distinctive identity and mission, which in turn might be restricting American’s willingness to dig in and give more.
Finally, it’s worth pointing out another powerful strain in the American charitable tradition—the devaluation of monetary gifts themselves in favor of the “helping hand.” At the turn of the last century, even while scientific charity reformers were attempting to rationalize giving, they were also trying to preserve traditions of neighborly assistance. The fact that such assistance could not be easily quantified and rationally appraised was regarded as a mark of its worth. And in many senses, it was considered a higher form of giving than monetary contributions. That idea is still with us today; and it’s possible that by focusing too much on the 2% rate, we miss other forms of voluntarism that have had more variability and elasticity over the years.
Nell: Maribel, during the Gilded Age great wealth concentrated among a few brought large philanthropy (Carnegie, Rockefeller, etc.) but also contributed to a subsequent progressive period (as the pendulum swung back against that excessive wealth). Do you see parallels between the Gilded Age and today, and do you think we are heading for a more progressive period? And what role do you think philanthropy will or won’t play in that?
Maribel: Indeed, many late nineteenth- and early-twentieth century Americans looked at Andrew Carnegie’s and John D. Rockefeller’s wealth (and even their philanthropy) with some suspicion.
Reflecting these Americans’ anxieties, for example, the United States Congressional Commission on Industrial Relations called John D. Rockefeller Sr. and his son in 1915 to defend the independence of the Rockefeller Foundation. As many scholars have noted, the Rockefellers had established a division of economic research in 1914 within the one-year-old foundation; and a few months later, the Ludlow massacre occurred at the Rockefeller’s Colorado Fuel Iron Company where women and children died when the state militia assaulted the strikers’ tent camp.
In response, the organization decided to organize a study on industrial relations under this new division and selected a close working friend of John D. Rockefeller Jr. (William Lyon Mackenzie King) to direct it. From the perspective of the American public, it was hardly easy to trust that gilded age tycoons who had undermined the rights of workers in the process of accumulating their wealth would have the interests of the people in mind when they funded social scientific projects to study the American populace. From this perspective, the Rockefeller Foundation was the playpen of industrialists who had defined interests in society and their policy-oriented social scientific research would be—far from disinterested—an extension of those interests.
And far from ignorant of Americans’ suspicions about gilded age levels of wealth, Andrew Carnegie himself discussed it head-on in The Gospel of Wealth (1889). Aware that Americans might find socialism an attractive alternative to capitalism, for example, he pitched philanthropy as the better form of wealth redistribution.
Today as then, Americans are confronting and discussing the great influence of leading philanthropists in public policymaking and of wealth inequality more broadly. However, I am not convinced that we are necessarily heading for a more progressive period.
I say this because I don’t see contemporary Americans reflecting the same level of angst about elite philanthropy nor with the broader topic of wealth concentration. Congress isn’t questioning leading philanthropists as it did with the Rockefellers in the early twentieth century nor do leading philanthropists seem threatened by Americans’ potential voting patterns, as Carnegie had been.
One key explanation might be that these earlier Americans entertained a vastly different meaning of American democracy than their successors today. For them, American democracy promised economic opportunity (or rather, freedom from class divisions) and an equal voice over public concerns. Today, it seems that the general American public and their representatives in Congress aren’t as convinced of this definition of American democracy. With a narrower understanding of American democracy, it might simply be more difficult for contemporaries to see how wealth inequality and elite philanthropy in public policymaking are democratic threats.
Philanthropies committed to resurrecting a more progressive period might just need to focus on ways to revive this earlier (dare I say, more robust) definition of American democracy and help empower Americans to fight for it.
Photo Credit: HistPhil
In September there was some surprising good news about climate change. Yes, you read that right. We are perhaps, slowly, starting to address that problem (mind blowing, huh?). And in other news, there was a call for funders to help nonprofits become better fundraisers and some tools to help nonprofits use data in that pursuit.
Add to that concern about what digitial technology is doing to our humanness and critiques of Teach for America, proposed changes to philanthropy policy and an emerging “network” entrepreneur, and it was a very interesting month.
And if you want to see past 10 Great Reads lists go here.
- If the world of social change is getting you down, if the challenges we face seem insurmountable, look no further than the New York Magazine where Jonathan Chait sees hope in the battle against climate change. As he puts it: “The willpower and innovation that have begun to work in tandem can continue to churn. Eventually the world will wean itself almost completely off carbon-based energy. There is, suddenly, hope.” Wow.
- Writing on the Blue Avocado blog, Aaron Dorfman from The National Committee for Responsive Philanthropy takes foundations to task for wanting their grantees to be financially sustainable, but not helping them build that capacity, “Why don’t more foundations invest in helping their organizing grantees develop independent funding streams? Here – as with many issues grantees face – even a little targeted capacity-building support would go a long way.” Yes, yes, a thousand times yes!
- One of the ways nonprofits can build fundraising capacity is by learning to use their data more effectively to raise money. To help in that effort, The Chronicle of Philanthropy put together a helpful toolkit of articles and case studies.
- And speaking of fundraising, the ALS Foundation continues to amaze me. In September, they released a nice infographic to the many donors of the 2014 Ice Bucket challenge reporting where their $115 million in donations went. Great donor stewardship and transparency!
- There seems to be a growing concern about what technology is doing to our humanness. Callie Oettinger writes “While social media has made sharing easier, allowing us to connect with the rest of the world, I often think about what would happen if people stopped trying to connect with the rest of the world and instead spent their time 1) creating value and 2) sharing value, rather than…creating crap and sharing crap.” And MIT professor Sherry Turkle released a new book, Reclaiming Conversation that argues we must “acknowledge the unintended consequences of the technologies to which we are vulnerable [and] make corrections and remember who we are — creatures of history, of deep psychology, of complex relationships, of conversations, artless, risky and face to face.”
- A new series launched at The Washington Post about the newest buzz phrase in the world of philanthropy, “effective altruism.” This is the idea that you should “optimize your donations to ensure that they are as “high-impact” as possible.” It is a fascinating and controversial idea.
- To counter the hype about “social entrepreneurs,” Jane Wei-Skillern (who wrote one of my favorite articles ever about networked nonprofits), David Ehrlichman, and David Sawyer introduced a new concept they call “network entrepreneurs.” As they put it, “Where social entrepreneurs often struggle to scale their own organizations despite heroic efforts, a network entrepreneur’s approach expands far beyond the boundaries of their own organization, supporting peers and partners across sectors to solve the problem. Not surprisingly, the potential for impact increases exponentially when leaders leverage resources of all types—leadership, money, talent—across organizations and sectors toward a common goal. And as a result of this work, we celebrate the change-generating network itself above any single person or institution.”
- I know I keep talking about how much I love the new History of Philanthropy blog, but this month was a perfect example of the tremendous value they bring the social change sector when Jeffrey Snyder explained how old and new philanthropy to support K-12 education differ. Fascinating. And it’s particularly interesting in light of Dale Russakoff’s new book that describes how Facebook founder Mark Zuckerberg’s $100 million donation to Newark public schools in 2010 hasn’t accomplished a whole lot.
- And that wasn’t the only educational reform effort that came under fire in September. Samantha Allen of the Daily Beast chronicled a growing chorus of critiques of Teach for America.
- Philanthropic visionary Lucy Bernholz released a list of proposed changes to philanthropy policy that will keep up with changing times. As she put it: “It’s time to recognize that the tax code is no longer the fundamental policy frame shaping philanthropy and nonprofits…it should be obvious that tax privilege is only one factor that Americans consider when thinking about using their private resources for public benefit…The tax code was the 20th century policy infrastructure for philanthropy. Digital regulations will provide the scaffolding and shape for 21st century associations and expression — aka, civil society.”
Photo Credit: Evan Bench
Note: As I mentioned earlier, I am taking a few weeks away from the blog to relax and reconnect with the world outside of social change. But I am leaving you in the incredibly capable hands of a rockstar set of guest bloggers. Next up is Kathy Reich. Kathy is Organizational Effectiveness and Philanthropy Director at the David and Lucile Packard Foundation where she helps grantees improve their strategy, leadership, and impact. Here is her guest post…
Philanthropy pundits often exhort nonprofits to “act more like businesses.” Usually I disagree; in fact, I think there’s a great deal that businesses could stand to learn from nonprofits.
In at least one area, though, I admit that all too frequently nonprofits lag their for-profit peers. Nonprofits simply do not invest enough time or money in talent assessment, development, and management.
Major national surveys provide a helpful snapshot of the nonprofit sector’s talent troubles. In the Bridgespan Group’s Nonprofit Management Tools and Trends 2014 survey, which polled almost 500 nonprofit organizations about their current management practices, nearly 60 percent of respondents agreed or strongly agreed that “hiring, training, and retaining staff is one of our greatest challenges.” Yet the survey found that only 40 percent reported using talent assessment and development tools, and just 38 percent said their organizations engage in leadership succession planning.
Similarly, in the Nonprofit Finance Fund’s 2015 State of the Nonprofit Sector survey, which included responses from more than 5,400 nonprofits nationwide, respondents were asked to name the top three challenges facing their organizations. “Ability to offer competitive staff pay and/or retain staff” was ranked in the top three by fully 25% of the respondents, behind only “achieving long-term financial sustainability” as one of the top three challenges facing nonprofits. Yet the same survey found that just 37 percent of respondents had invested money or time in staff professional development in the past year. Only 28 percent had given cost-of-living raises, and 18 percent had given raises beyond COLA.
At the Packard Foundation, program officers tell me that they see signs of this underinvestment almost every day. Some problems that our nonprofit grantee partners routinely report:
- Executive turnover is frequent, and often traumatic.
- Nonprofits have a hard time finding appropriate candidates for senior management roles, including CEO, program executives, development directors, and communications directors.
- The leadership many nonprofits have is not reflective of the leadership that they need, or the communities they serve. In most of the fields in which the Packard Foundation works, nonprofit leadership remains predominantly white, male, and middle-aged, even as our country becomes younger, more diverse, and hopefully, more committed to racial and gender equity.
- Emerging leaders under age 45 report high levels of career dissatisfaction, driven in part by lack of professional development and advancement opportunities. In a 2011 Young Nonprofit Professionals Network survey, only 36 percent of respondents said that their organization invested in “bench strength” to develop emerging leadership. Of that group, less than 47 percent said their organization implemented these investments effectively.
Nonprofits and foundations both have critical roles to play in ensuring that the nonprofit sector has a robust, diverse talent pipeline now and in the future. First, foundations need to step up their financial support for leadership. The private sector spends $12 billion annually, an average of $120 per employee, on developing leaders, investing in their management and technical skills so that they can move up the ranks or excel in their current jobs. In contrast, philanthropy’s investment in nonprofit leadership development totals an average of $29 per employee annually.
Foundations can do much more. Some concrete ways that they can help:
- Fund nonprofit overhead so that nonprofits have enough money to pay their people competitively and can have the operations in place necessary to support their staff and manage their talent. Depending on their size and talent needs, some nonprofits may need to hire a Chief Operating Officer, a Human Resources Director, or a Chief Talent Officer.
- Support nonprofits to develop “right-sized” performance assessment and management systems, as well as meaningful succession plans for key leaders.
- Include funds for staff professional and leadership development in project support grants.
- Incentivize nonprofits to develop cultural competency in hiring and management so that they can attract and retain diverse employees.
But foundations cannot tackle this issue alone. No matter what their size, nonprofit boards and executive leadership need to focus on talent issues and ensure they have appropriate plans in place to manage and develop staff for their organizations. They need to implement thoughtful, intentional strategies and process to ensure that they are identifying their own talent needs, assessing the strengths and growth areas of their staff, and providing ongoing development and feedback to all employees, particularly those with high growth potential. And they need to make the case for talent to their funders, along with concrete examples of how investing in leadership capacity will improve outcomes.
In the nonprofit sector, as in business, leadership matters. Let’s be sure we’re all investing our time, and our money, where it counts.
June was an amazing month in the world of social change.
Most notably, the long fight for marriage equality was won with the Supreme Court’s ruling in Obergefell v. Hodges. It is moments like these where the long, arduous road towards social change makes sense. But that wasn’t all that was going on in the busy month of June. From “new” tech philanthropy, to the orthodoxies of philanthropy, to the oversight of philanthropy, it was all up for debate. Add to that some fascinating new ideas for museums, new data on how Millennials get their news, and a fabulous new blog about the history of philanthropy. It was a whirlwind.
And if you want to see past 10 Great Reads lists go here.
- The biggest news by far in June was the Supreme Court’s 5-4 ruling in Obergefell v. Hodges making gay marriage legal. In the ruling opinion Justice Kennedy writes: “As some of the petitioners in these cases demonstrate, marriage embodies a love that may endure even past death…Their hope is not to be condemned to live in loneliness, excluded from one of civilization’s oldest institutions. They ask for equal dignity in the eyes of the law. The Constitution grants them that right.” While this is a huge win for equality, I think the two really interesting parts of the story are 1) how relatively quickly gay marriage went from banned to law and 2) the various actors that made that social change happen. Some argue that Andrew Sullivan’s 1989 landmark essay in New Republic started the intellectual case for gay marriage. This New York Times interactive map shows how gay marriage went from banned to legalized state by state over time. And Evan Wolfson, founder of Freedom to Marry, describes the decades long struggle of nonprofit reformers and their donors, including the Haas Fund in San Francisco, to make marriage equality happen.
- A new blog, the HistPhil blog, launched in June to much acclaim. There is an enormous need for a historical perspective as we work to make nonprofits and the philanthropy that funds them more effective. HistPhil has already begun to provide that in spades with excellent posts on the Supreme Court ruling, among many other topics you will see below.
- Sean Parker, co-founder of Napster and founding president of Facebook, launched a new foundation and wrote a controversial piece in the Wall Street Journal about his “new” vision for philanthropy. Some found his ideas full of hubris, while others found him to be “an articulate evangelist for tech philanthropy.“
- And if that wasn’t enough philanthropic controversy for you, there were two other debates waging in June. First was the response to David Callahan’s New York Times piece, “Who Will Watch the Charities?” where he argued that we need greater oversight on nonprofits and their funders. Phil Buchanan of the Center for Effective Philanthropy quickly shot back that while Callahan raised some important questions, he ignored the complexity of the sector and reform efforts already under way. And then the two got into an interesting back and forth. Finally, Callahan wrote a follow up piece for Inside Philanthropy. Good stuff!
- Along the same lines, the other point of debate in June centered around a Stanford Social Innovation Review article where Gabriel Kasper & Jess Ausinheiler attempted to challenge the underlying assumptions in philanthropy. But now that we have a new expert on the history of philanthropy on the block, Benjamin Soskis from the HistPhil blog gave us a more accurate historical perspective about just what is and isn’t philanthropic orthodoxy.
- Michael O’Hare, professor of public policy at UC Berkeley, wrote a great long form piece in the Democracy Journal arguing that museums could become much more relevant and financially sustainable if, among other things, they began selling their stored artwork. Crazy controversial, but fascinating, ideas.
- Writing in the Stanford Social Innovation Review, Matthew Scharpnick cofounder of Elefint Designs, argued that recent ProPublica investigations of the American Red Cross uncovered our double standard for nonprofits. As he writes: “We are asking organizations to meet competing demands—many of which are at odds with how they are funded. We want nonprofits and NGOs to solve problems as effectively as private-sector organizations, and we want them to do it without any of the advantages and with far more constraints.”
- The Ford Foundation announced a sweeping overhaul in their grantmaking strategy. They will now focus solely on financial, gender, racial and other inequalities, and double their unrestricted giving. Larry Kramer, president of the Hewlett Foundation, described how he is closely watching this historic move. And Brad Smith, president of the Foundation Center, offered a view of how philanthropy has approached inequality.
- The Hewlett Foundation’s Kelly Born provided some interesting thoughts about what a new Pew Research Center report about how Millennials get their news means for civic engagement.
- And finally, on an inspirational note, Steven Pressfield articulated how “artists,” or really anyone hoping to bring something new into the world (a painting, a novel, a solution to a social challenge), should think: “As artists, [we believe]…that the universe has a gift that it is holding specifically for us (and specifically for us to pass on to others) and that, if we can learn to make ourselves available to it, it will deliver this gift into our hands.” Yes.
As I mentioned earlier, it is so important to take time away to rejuvenate and reconnect with your passions, family and friends. So I am taking my own advice and taking some time off later this summer to connect with the world outside of social change.
And so for the second summer in a row I’ve asked a group of social change thought leaders to write guest blog posts in my absence (you can read last summer’s guest blog posts here).
I am so excited about this year’s group of amazing social change thinkers. They are experts in social change finance, philanthropy, political reform, outcomes data, organizational effectiveness and much, much more. They are smart, thoughtful, engaged and visionary leaders. And they are all helping to move social change forward in big ways.
Below is the lineup of guest bloggers with background information on each of them. Their posts will begin in late July. Enjoy!
Antony is the CEO of Nonprofit Finance Fund (NFF), a national nonprofit and financial intermediary where he oversees more than $340 million of investment capital and works with philanthropic, private sector and government partners to develop and implement innovative approaches to financing social change. NFF also creates the annual State of the Sector Survey. Antony writes and speaks on the evolution of the social sector and the emergence of the global impact investing industry. Prior to leading NFF he was Managing Director at the Rockefeller Foundation. He is the founding board chair of the Global Impact Investing Network and convened the 2007 meeting that coined the phrase “impact investing.” You can read my past interview with Antony here.
UPDATE: Here is Antony’s guest post.
Kelly is a program officer at the Hewlett Foundation working on their Madison Initiative, which focuses on reducing today’s politically polarized environment. Before joining Hewlett, Kelly worked as a strategy consultant with the Monitor Institute, a nonprofit consulting firm, where she supported a range of foundations’ strategic planning efforts. In addition to her experience as a strategy consultant, Kelly has worked with various nonprofit and multilateral organizations including Ashoka in Peru, the World Bank’s microfinance group CGAP in Paris, Technoserve in East Africa, and both The Asia Foundation and Rubicon National Social Innovation in the Bay Area. Kelly guest lectures on impact investing at Stanford’s Graduate School of Business and often writes for the always thoughtful Hewlett Foundation blog.
UPDATE: Here is Kelly’s guest post.
Phil is President of the Center for Effective Philanthropy (CEP), a nonprofit that is the leading provider of data and insight on foundation effectiveness. CEP helps bring the voice of grantees and other stakeholders into the foundation boardroom and encourages foundations to set clear goals, and coherent strategies, be disciplined in implementation, and use relevant performance indicators. Phil writes and speaks extensively about nonprofits and philanthropy and rarely pulls punches when he does. He is a columnist for The Chronicle of Philanthropy and a frequent blogger for the excellent CEP Blog. He was named to the 2007, 2008 and 2014 “Power and Influence Top 50” list in The Nonprofit Times. You can read my past interview with Phil here.
UPDATE: Here is Phil’s guest post.
Kathy is Organizational Effectiveness and Philanthropy Director at the David and Lucile Packard Foundation where she helps grantees around the world improve their strategy, leadership, and impact. Her team makes grants on a broad range of organizational development issues, from business planning to social media strategy to network effectiveness. She also manages the Packard Foundation’s grantmaking to support the philanthropic sector. Prior to joining the Foundation, she worked in a non-profit, on Capitol Hill, and in state and local government in California. Kathy serves on the board of Grantmakers for Effective Organizations and on the advisory committee for the Center for Effective Philanthropy. You can read my past interview with her here.
UPDATE: Here is Kathy’s guest post.
I asked David to be a guest blogger again this summer because he is so insightful and often points out things that few others in the sector are willing to acknowledge. He is Director of Analytics for Family Independence Initiative, a national nonprofit which leverages the power of information to illuminate and accelerate the initiative low-income families take to improve their lives. David is also the former founder of Idealistics, a social sector consulting firm that helped organizations increase outcomes, demonstrate results, and organize information. He writes his own blog, Full Contact Philanthropy, which is amazing. You can read his past guest blog post here and my interview with him here.
UPDATE: Here is David’s guest post.