Amid all of the uncertainty in the wake of the election, one thing is sure. In order to survive and thrive, nonprofit leaders cannot stick their heads in the sand. As others have already enumerated, there is much to be done to prepare for the road ahead — from ensuring your board is actively engaged, to bolstering your partnership with funders, to growing (or launching) your advocacy efforts.
As part of all of this, it is critical that nonprofit leaders not go it alone. They must understand and harness the power of networks in order to grow their ability to influence the future.
As Jane Wei-Skillern and Sonia Marciano put it, networked nonprofits
“see themselves as nodes within a constellation of equal, interconnected partners, rather than as hubs at the center of their nonprofit universes. Because of the unrestricted and frequent communication between their different nodes, networked nonprofits are better positioned to develop more holistic, coordinated, and realistic solutions to social issues than are traditional nonprofit hubs.”
And now — more than ever — we need a social change sector that is coordinated and offers real solutions to the many social challenges we face.
But what does that look like? How does a single nonprofit leader analyze and begin to grow her organization’s networks?
She must work with board and staff to analyze their current and potential networks and create a plan for growth, by asking these questions:
Who Else Is Working on Similar Social Issues?
What other entities are working on similar issue areas? Are you connected to them? In a significant way? If not, make a list and start getting your board and staff to forge alliances, where possible. And ask each of these entities where else you should be connected.
Who Are the Leaders in Other Sectors?
Beyond just the nonprofit space, are there key for-profit industries or local, state or federal government entities that impact your set of social issues? Are you connected to these networks in a significant way? If not, get busy.
Who Are the Policymakers Impacting Your Issue Area?
To the earlier point about moving into the advocacy space (which more and more social change experts are encouraging nonprofits to do), think about local, state or federal policies that might impact your work. Who are the policymakers you should be talking to in order to make sure they fully understand the issues and their impact? Do your networks include these policymakers? If not, get to work.
What Expertise Do We Lack?
A single organization has only a very limited list of core competencies, but you will need a lot of varied expertise to create the social change you seek. So where are you lacking? And who out there (people, organizations) have that expertise? Find them and figure out how you can partner in a significant way to move forward.
Who Are the Influencers?
What about people who are not represented above, but who have the ear of those who are? Who are the key influencers, and are you connected to them? If not, again make a list and start attacking it.
Once you know all of the people and groups to which you want your organization connected, start assigning parts out to your board and staff. Set up meetings to explore how you can start partnering towards bigger social change.
Because we need social change leaders who are not frightened by the looming future, but rather aligned and empowered to face it together.
If you want to learn more about building networks for social change, read my interviews with network experts Anna Muoio, Jane Wei-Skillern, and Sean Thomas-Breitfeld and check out the New Network Leader website.
Photo Credit: Martin Grandjean
In this month’s Social Velocity interview, I’m talking with Jane Wei-Skillern.
Jane is the co-author of the groundbreaking 2008 Stanford Social Innovation Review article, “The Networked Nonprofit,” and a leading researcher on networks for social change. She is a senior fellow at the Center for Social Sector Leadership at the University of California Berkeley’s Haas School of Business and has also served on the faculties of the London, Harvard, and Stanford Business Schools. For the past 15 years, her research has focused on high impact nonprofit networks, network leadership and network cultures.
You can read other interviews with social changemakers in the Social Velocity interview series here.
Nell: Jane, you and Sonia Marciano arguably coined the term “networked nonprofit” with your 2008 Stanford Social Innovation Review article of the same name. But is the idea of creating and using networks to create social change necessarily new to the space? How is a networked nonprofit different now than in the past, or what has changed?
Jane: In our article, we were most interested in the ways in which leaders and organizations catalyzed and engaged in collaborations successfully. Thus, the focus in the article was much more on the culture, or the norms and values, of what makes collaborations succeed, rather than a strict definition or structure of what collaborations should look like.
The concept of partnerships, collaboration, alliances, networks, or any number of other terms we could use, are of course nothing new in the nonprofit sector. In fact, we are not particular about the terminology that is used to describe collaborative efforts or whether they choose to use the term “networked nonprofit” at all. These lessons were drawn from detailed case studies of successful networks, many of which had been operating for years or decades before we studied them as researchers.
At the same time, we used the term “networked nonprofit” to describe a particular approach to collaboration, one that was oriented around social impact above all else, that emerged from the bottom up by community members in the field, as a way to address problems more effectively, rather than collaboration for collaboration’s sake. The networks were unique in that while they might have been catalyzed by a few instrumental actors initially, all participants worked in true partnership, as peers and equals to drive toward field level impact.
Consequently, they were able to achieve significant commitment, investment and support from participants, and generate leverage on resources and capacity, to achieve mission impact much more efficiently, effectively, and sustainably. It is this experience and wisdom about what was working well in the field that we wanted to bring attention to, especially at a time when so many in the field were struggling to scale impact through individual social entrepreneurs/social enterprises by proliferating program/organization innovations, building organizational capacity, scale, and brands.
Nell: How is the concept of a network different than or related to the concept of a social movement, like BlackLivesMatter? Are social movements the same or different than networks?
Jane: I believe that the concepts that enable social movements to succeed are very similar to those that would enable networked nonprofits to succeed. Social Movement scholars and analysts have highlighted four stages of successful social movements which were succinctly described in this article. These four stages are:
- A community forms around a common goal
- The community mobilizes resources
- The community finds solutions (what I call “fourth options”)
- The movement is accepted by (or actually replaces) the establishment
In this respect, networked nonprofits are very similar. The network emerges around a common goal, rather than a particular program or organizational model. The community mobilizes the resources from throughout the network, and based on existing relationships in the community. The solution is emergent and comes from the community members themselves, rather than being pushed from the top down. And finally, once a network is up and running and proves itself to be effective, it becomes the primary vehicle for change, rather than the individual organizations themselves.
Nell: You recently launched a new site offering resources to those interested in becoming a networked leader. What is your goal with this new site?
Jane: The stated mission of the website is: “To champion network leaders, and the networks that they serve, to nurture change on the challenges that dwarf us all.” It’s an interesting story about how we came to create this website together.
In early 2016, I had the opportunity to work with Children and Nature Network to share my research on network leadership through a series of webinars with their network members. Through this project I got to know Amy Pertschuk, co-founder of Children and Nature Network, who found the ideas so compelling that she offered her services pro bono to help develop a web site to share resources.
Initially, Amy asked if we should create a domain name focused on me and my research. I immediately realized that that would be too limiting. In order to achieve leveraged and scalable impact through this website, I absolutely needed to practice what I preach and make the site much less about me and much more about championing network leaders and the networks of which they are a part.
It also made sense to reach out to some of my most inspiring and trusted colleagues who have deep experience leading, developing, and writing about networks themselves to develop the website jointly. We have all worked to build this site to support experienced and aspiring network leaders. The resources on the site have been collected and curated by a community of practitioners and network supporters working to increase the impact of social sector leaders and organizations by promoting the principles of successful networks.
Nell: Is the networked approach right for every nonprofit, or does it apply better to certain types of leaders or organizations? And how can a nonprofit leader interested in this approach move forward with it?
Jane: I like that you emphasize that it is an approach rather than a structure or model. Sometimes people think that they need to reorganize or restructure in order to be a network. Instead, I view it as a mindset and leadership approach that can be used by people in all types of organizations, whether in the private, public, or nonprofit sectors. Though I do believe that it is particularly relevant in the social sectors where the primary objective is, or should be, to generate social value that is not owned or captured by any single entity, in contrast to private sector organizations whose objective is to generate shareholder value.
The network leadership principles focus on: mission before organization; governance through trust-based relationships, rather than top down controls; promotion of others rather than oneself; and building of constellations rather than stars. These can be applied at all levels of an organization, from the executive suite to leaders out in the field. It is a shift from traditional leadership approaches that focus on the charismatic individual who has formal authority to get things done, to a more open-sourced approach to addressing social problems.
Network leaders start with the mission and engage others (especially those they seek to serve) to mobilize resources to support them doing what they would have wanted to do for themselves. It is a significant departure from doing ‘to’ and instead working with others as peers, equals, and true partners.
Photo Credit: Harvard Business School
Although I already mentioned (in my September 10 Great Reads list) a really interesting article about “network entrepreneurs,” I want to further explore the concept because I think it could be a game changer for nonprofit leaders willing to embrace it.
Writing in the Stanford Social Innovation Review in September, Jane Wei-Skillern, David Ehrlichman, and David Sawyer describe a “network entrepreneur” as different from, and much more effective at creating social change than a typical nonprofit leader. As they put it:
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 this mirrors Wei-Skillern’s earlier article from 2008, “The Networked Nonprofit” where she described how a “networked nonprofit” builds alliances far beyond its own walls and is thus much more effective at creating social change that a traditional nonprofit:
Many traditional nonprofits form short-term partnerships with superficially similar organizations to execute a single program, exchange a few resources, or attract funding. In contrast, networked nonprofits forge long-term partnerships with trusted peers to tackle their missions on multiple fronts. And unlike traditional nonprofit leaders who think of their organizations as hubs and their partners as spokes, networked nonprofit leaders think of their organizations as nodes within a broad constellation that revolves around shared missions and values.
In essence, the network approach to social change is one of true leadership — leadership writ large. Because a true leader leaves their ego, and the ego of their organization, aside in order to assemble all the required resources (individuals, institutions, networks, funding) to chart a path towards larger social change. Instead of leading an organization, a network entrepreneur is, in essence, leading a social change movement.
A network entrepreneur understands that social change lives beyond any single organization. It requires someone (or a set of someones) to marshall all the necessary resources, create a larger change vision and lead people towards that vision.
This concept is so critical to nonprofit leaders who are often working with such limited resources. If instead of working to build an institution, a nonprofit leader worked to build networks, she could be much more effective at creating long-term social change.
So what does this network approach look like in practice for a nonprofit leader?
Instead of thinking just about your organization, your staff, your mission, your board, your donors, you must analyze and connect with the larger marketplace outside your walls. You need to analyze the other people and entities working on similar challenges, and not just in the nonprofit space, but also in other sectors, geographies and time periods (yes, history matters!). Determine how other places, other people, other organizations, both past and present, addressed similar problems. You need to understand the points of leverage for attacking the problem on a much larger scale than your single organization can. Figure out who the influencers are in the space and how to connect your work with those other individuals, institutions, networks.
The network approach also requires that nonprofit leaders move away from the resource-constrained, scarcity approach that keeps them from forging alliances with other entities that might be competing for the same limited pool of funding. Instead leaders must take an abundance approach that leaves fears behind in favor of a bigger, bolder approach.
And the network approach involves having the confidence to think that there is potentially a larger solution and that you might be part of it. The dysfunctional power imbalance present for so long in the nonprofit sector has bred a crisis of confidence that keeps nonprofit leaders focused just on their own work, instead of seeing the larger picture and envisioning a larger solution or role in that solution.
The network approach to social change involves taking a big step back from the work you have always done. It requires asking a much larger set of questions. And having the faith, confidence and leadership to plug into the network for social change.
Photo Credit: Wikimedia
In the nonprofit world marketing is fairly misunderstood. “Marketing” is the act of segmenting the potential market for your products or services and then targeting the right segment(s) in order to convince them to “buy.” While in the for-profit world there is typically just one customer, in the nonprofit world there are (at least) two distinct customer groups:
- Those benefitting from your products or services (“Clients”) and
- Those buying your products or services (“Funders”)
Often, marketing to Clients is less tricky because demand is so high for a nonprofit’s services. So the real challenge is to create an effective marketing strategy to attract Funders. But even within that category there can be many different types, depending on a particular nonprofit’s business model. Marketing to foundations vs. individuals vs. earned income customers vs. government contractors — it can get quite complex.
Which is why it is so important for nonprofit leaders to understand some basics about how marketing works.
You Must Know Who You Are Marketing To
Market segmentation is thinking strategically about which specific people you are trying to reach within the vast universe. Anyone who has money should NOT be the target of your nonprofit’s fundraising efforts. Instead, you have to think about what distinguishes people who have an affinity for your work from the rest of the world. Clearly define their particular demographic (age, gender, income, job) and psychographic (lifestyle, interests, attitudes) characteristics. Create some “target personas” (HubSpot has a great tool for this) that define your target group(s) along different dimensions and then tailor your marketing efforts to where they are and what specific messages will compel them to act.
There’s No Such Thing as “Raising Awareness”
I can’t tell you how many times I’ve heard a nonprofit leader say that they are holding an event, or trying to generate media coverage, or sending out a mailer in order to “raise awareness.” Let me be blunt — that phrase is meaningless. Whose attention (specifically) are you trying to capture (see #1 above)? And are you trying to get their attention in the places they already are? And are you talking with them in a way that is meaningful and will encourage them to act? When you attempt to “raise awareness” without a specific and targeted strategy you are just shouting in the wind.
The Market Is Increasingly Crowded
And now more than ever you are shouting in the wind because of the rapidly changing digital environment in which we all live. We are bombarded with an exponentially increasing amount of messages every day. It is completely overwhelming. So unless you get really specific about who exactly you are trying to reach and how exactly you are going to compel them to act (again, see #1 above), you are hopelessly lost.
Push Marketing is Dead
And because of this rapidly changing digital environment, push marketing — the traditional approach of sending out a press release, putting an ad in the paper, sending a direct mail piece, or any other way you PUSH out a message and hope people will act — has become completely ineffective. Instead you want to use PULL activities where you create and participate in communities where your target personas are already present. You connect with them, empower them to get involved and then let them tap into their own networks to help your jointly held cause.
You Must Embrace The Network
In the end you must create a completely different philosophy about marketing. Stop creating your mission in a vacuum and then begging for any and all support to make it happen. Instead, you must break down the walls of your organization and tap into networks outside that have similar social change goals and who can work with you to make that change happen. Rather than investing in an advertising campaign, use those resources to create a network strategy to identify key influencers who can help move your goals forward and connect with them to figure out how you can work together. We live in an increasingly networked world and only those who connect with it will thrive.
You must reinvent your marketing approach. Instead of shouting a message and hoping someone will listen, get strategic about identifying people who can become partners in making a joint social change vision happen.
Photo Credit: pexels.com
Building and keeping a highly effective nonprofit staff is really tricky. The recently released 2015 Nonprofit Employment Practices Survey from NonprofitHR found that 50% of nonprofits surveyed plan to add new positions in 2015, compared to 36% of private companies. But, staff recruitment and retention are still significant hurdles for nonprofit leaders, with 52% of nonprofits lacking a recruitment strategy and 27% reporting their greatest retention challenge is low wages.
So how can nonprofits grow their staffs when they are hampered by significant recruitment and retention challenges?
Here’s how I coach my clients to build a highly effective nonprofit team:
Recruit Outside Your Comfort Zone
The 2015 Nonprofit Employment Practices Survey found that the top recruitment strategy for nonprofit leaders is to “use a network of friends and colleagues.” But that’s not a strategy. As with everything, nonprofit leaders must embrace the idea of a “networked nonprofit,” growing their connections to people and organizations outside their comfort zone. To find your next staff rockstar, be strategic about getting your job in front of new audiences and networks. Come up with a list of 50-100 people who might be connected to someone who fits the job’s qualifications. Think of strategic allies, leaders in the field, funders, volunteers. Send the job posting and ask them to direct great candidates to you. And in addition to posting the position on regular job sites, send it out through all of your social media channels and ask your board, partners, allies, funders, etc. to do the same. Cast your net far and wide in order to recruit the best and brightest.
As I said, one of the biggest challenges to retaining staff is low salaries. But the fact is that staff turnover is an enormous cost to an organization (recruitment, lost time, retraining) so convince your board that you should pay competitive salaries in order to save the organization money in the long run. Do salary research (at salary.com, or from nonprofit salary surveys in your region) and determine what a competitive wage for your position really is. Then convince your board to increase the budget to accomodate it. Move from the scarcity mindset to the abundance mindset, or if you just don’t have the funding right now, raise capacity capital to elevate your fundraising function so that you can recruit and retain top talent.
Hire The Right Person
Nonprofit leaders must go against the default, which is to hire someone with less experience than the position requires (since it’s cheaper). Instead hire someone who can take the position to the next level. Hire the person who has the demonstrated experience you need and is hungry to build that function in your nonprofit. But keep in mind that finding that person takes time. Many nonprofit leaders make quick hiring decisions because they are desperate to fill a position and end up suffering a poor fit later. Instead, create a detailed due diligence process which includes multiple rounds of interviews (quick screening phone calls, longer one-on-one interviews, interviews with their future staff colleagues, interviews with key board members), a written “homework assignment” to gauge their skills, and detailed reference checks. Be thoughtful and methodical in your process and spend the time it takes.
Once you have a great person in place, make sure you lead them effectively by using goals and strategy, not micromanagement. The best way to do this is to schedule a 30-60 minute, weekly, one-on-one meeting with each of your direct reports that focuses on your goals for their position. This allows you to give your staff ample leeway to shine, while monitoring their progress along the way. You will also have fewer interruptions during the rest of the week because your staff feels they get the attention and feedback they need in a regular, dedicated meeting. This creates an empowered staff, a confident leader, and a productive organization.
Like anything else, doing something well takes strategy and the will to effectively implement it. You can recruit and retain a phenomenal nonprofit staff, but you must be thoughtful about it.
If you want to learn more about the coaching I provide nonprofit leaders — on staffing, board development, fundraising, strategy and more — check out my Coaching page.
Photo Credit: Maurice Bramley
I’ve been thinking a lot lately about how networks and institutions must work together to create social change. As I mentioned earlier, social change happens when networks (loose connections of people and groups) organize themselves enough to pressure outdated institutions to adapt (like in the civil rights movement, global democracy movements, and the state-by-state legalization of gay marriage).
But when networks and institutions don’t connect, social change doesn’t happen (like in the Occupy movement). So networks must organize enough to influence institutions, and institutions must open themselves enough to let networks in. Social change requires that the two work in tandem.
David Brooks captured this theme in his recent New York Times column when he talked about the death of the “Organization Man.” He claims that we are witnessing “a failure of governance around the world” because networks are being valued over institutions, as he puts it:
A few generations ago, people grew up in and were comfortable with big organizations — the army, corporations and agencies. They organized huge construction projects in the 1930s, gigantic industrial mobilization during World War II, highway construction and corporate growth during the 1950s. Institutional stewardship, the care and reform of big organizations, was more prestigious. Now nobody wants to be an Organization Man. We like start-ups, disrupters and rebels. Creativity is honored more than the administrative execution. Post-Internet, many people assume that big problems can be solved by swarms of small, loosely networked nonprofits and social entrepreneurs. Big hierarchical organizations are dinosaurs.
Networks are king and institutions are left by the wayside, resulting in chaos. Effective social change happens when networks infiltrate institutions enough to help them adapt.
This is echoed in Jane Wei-Skillern & Sonia Marciano’s groundbreaking Stanford Social Innovation Review article in 2008, “The Networked Nonprofit.” They argued that nonprofit institutions must connect to and become more like networks in order to effectively create social change:
Most social issues dwarf even the most well-resourced, well-managed nonprofit. And so it is wrongheaded for nonprofit leaders simply to build their organizations…By mobilizing resources outside their immediate control, networked nonprofits achieve their missions far more efficiently, effectively, and sustainably than they could have by working alone…Unlike traditional nonprofit leaders who think of their organizations as hubs and their partners as spokes, networked nonprofit leaders think of their organizations as nodes within a broad constellation that revolves around shared missions and values…According to our research, nonprofits that pursue their missions through networks of long-term, trust-based partnerships consistently achieve more sustainable mission impact with fewer resources than do monolithic organizations that try to do everything by themselves.
But it is not just a one-way street. For social change to take hold, institutions must connect to networks and networks must connect to institutions. The Occupy movement is a great example of what happens when a network doesn’t connect to institutions. The movement eventually died because, as The Economist put it, the Occupy Movement “did not become the sort of mass movement that could deliver legislative and regulatory change.”
For real change to happen we need networks and institutions to work together. Networks are fluid, innovative, energetic and quick-moving, while institutions are well-resourced, legitimate, and powerful. So the challenge for social change leaders is to get outside your four walls, figure out where the networks and institutions lie, and forge real connections.
Photo Credit: Berlin Wall, RIAN Archive
One thing the nonprofit sector desperately needs is more people asking hard questions. A lot of time is spent skirting issues or sugar coating situations. If nonprofit leaders instead forced some challenging conversations, with hard questions as the impetus, the sector could become more effective. And the place to start is with a nonprofit leader questioning herself.
I’ve written before about questions to ask your board, and questions to ask your nonprofit, and questions to ask before you pursue a new opportunity, but there are also some key questions a nonprofit leader should ask herself.
On a fairly regular basis a nonprofit leader should ask:
- Am I Leading or Managing?
A manager shuffles resources around, waits to be told what to do, and focuses on checking things off her list. But a leader crafts a larger vision for her organization, articulates what her nonprofit is trying to accomplish, and then marshals all the resources at her disposal (board, staff, funders, partners) toward that vision. And when some of those resources won’t align to the vision (board members who aren’t performing, donors who want to veer off course) she confidently tells it like it is. A manager will deploy resources, but a leader will ensure that the deployment results in social change.
- How Can I Address My Weaknesses?
A great leader recognizes when he is falling short and where he needs complementary abilities. A leader who doesn’t know how to fundraise hires a rockstar Development person, or gets fundraising training. A leader who struggles with strategic decisions finds a leadership coach. A leader who can’t build an effective board, asks fellow nonprofit leaders for counsel. Most importantly, if there are costs associated with addressing his weaknesses, a leader raises the money he needs, instead of doing it on the cheap.
- Am I Selling Myself (and My Nonprofit) Short?
I see so many nonprofit leaders not fighting for what their organization really needs. From not articulating the true costs of their nonprofit to funders, to allowing the board to shirk their fundraising responsibilities, to addressing capacity constraints with a band-aid, to burning out from long hours with not enough staff, nonprofit leaders are constantly giving their organizations, and themselves, short shrift. A true leader finds the confidence to stand up for herself and her organization and demand what is truly required to achieve the vision for change.
- Which Other Leaders Should I Align With?
It amazes me how many nonprofit leaders exist in a bubble. They may collaborate with others on a programmatic level, but they are not regularly analyzing the larger marketplace in which they operate (emerging competitors, new technologies, changing needs) and figuring out with which other leaders impacting the field (policymakers, organization heads, advocates, influencers) they should forge alliances. Social change requires much more than any single organization can accomplish. It is critical that nonprofits become fully networked in their area of social change. A nonprofit leader makes that happen.
- Am I Still The Right Person for The Job?
This is such a hard question. But if you simply don’t have the skills (or the energy) to lead the right road ahead, then you must step aside. Don’t hold your organization and the vision back because of your ego. If you are a true leader, you have assembled a whole army of board, staff, supporters and allies that can continue to move forward in your wake. It’s not easy to recognize or admit, but if you really care about the cause and want to see real change happen, then you should regularly be assessing this.
A true nonprofit leader drives the vision, marshals resources, forges alliances, inspires support, and, ultimately, leads the charge toward social change. Because now more than ever we need real social change leaders. People who are willing and able to find the best way forward and the confidence, smarts, and humility to lead us there.
If you want to learn more about nonprofit leadership, download the Reinventing the Nonprofit Leader book.
Photo Credit: iwona_kellie
This week I attended the 5th annual Social Impact Exchange Conference in New York City. It was an interesting gathering of funders, change makers and intermediaries all grappling with how to reach and sustain scaled social solutions.
“Scale” is such a challenging concept, and as I mentioned earlier, there are many entities struggling with exactly what scale means. According to Heather McLeod Grant (author of Forces for Good) whose keynote address kicked off the conference, “scale” is no longer about growing individual organizations or addressing individual issues, but rather about building movements and networks.
The idea of a networked approach to social change is not a new one (see the great Stanford Social Innovation Review article from 2008 by Jane Wei-Skillern and Sonia Marciano on this approach), but Heather underlined the importance of a more integrated and aligned approach to creating social change. I would have liked to see this idea taken further, perhaps with some of the Transformative Scale discussion that is happening elsewhere, included in this discussion.
There were some real highlights of the conference for me. First was the luncheon panel on the Black Male Achievement Movement and President Obama’s My Brother’s Keeper initiative. Tonya Allen of The Skillman Foundation was a hard hitting moderator of Shawn Dove, from the Campaign for Black Male Achievement, William Snipes from Pipeline Crisis/Winning Strategies, and Andrew Wolk from Root Cause.
The group had a fascinating conversation about the movement to address “a whole generation of young men being pushed to the side.” As Snipes so eloquently put it, “This is a problem about who we are as a society, whether or not we are going to survive. The road we are on is not sustainable. We cannot continue to incarcerate one third of a community. This is an impractical way to run a society.”
The panel described and debated the complexity of addressing a huge systemic problem and how they have launched a movement to do just that. It was a candid and thought-provoking exchange.
Another highlight was GuideStar CEO Jacob Harold’s talk on their exciting efforts to transform the nonprofit information landscape (Jacob is describing this landscape in the picture at the left).
GuideStar’s goal is to address the “two elephants in the philanthropic room:” 1) some nonprofits are better than others (they create more impact per dollar spent), and 2) some donors are better than others (they create more impact per dollar given).
To address these “elephants,” GuideStar is collecting and analyzing deeper information about nonprofits and then distributing that information so that donors make better investments. (More on this next month when I interview Jacob as part of the Social Velocity Interview Series.)
The other real highlight of the conference for me was the keynote address on financial sustainability from Antony Bugg-Levine, head of the Nonprofit Finance Fund. Antony defined financial sustainability as “Repeatable and reliable revenue that exceeds ongoing operating costs, coupled with the ability to fund periodic investment in adaptation and growth.” In other words, a financially sustainable nonprofit brings enough reliable revenue in the door and can, when needed, raise capital for change and growth.
And that capital piece is often overlooked by nonprofits and funders. Antony described 5 types of capital helpful to nonprofits:
- Change Capital to position an organization for growth.
- Working Capital to handle fluctuations in cash flow.
- Recovery Capital to address shocks to an organization (natural disaster, fire, etc.)
- Risk & Opportunity Capital to develop a new program or different approach.
- Endowments which can provide some unrestricted money, but should not be considered reliable revenue.
Antony also described 5 things that funders do and 5 things that nonprofits do to derail sustainable growth (pictured at right.)
I also enjoyed participating in the “Business Models for Sustainability at Scale” panel with my colleagues Dana O’Donovan from Monitor Institute, Megan Shackleton from the Einhorn Family Trust, Heidi Shultz from the Helmsley Charitable Trust and Craig Reigel from the Nonprofit Finance Fund. We had a great discussion with very thoughtful and engaging audience questions about how to create sustainable financial models and how philanthropy can help move that forward.
The Social Impact Exchange assembled a smart, talented group of people to grapple with how we fund and grow solutions to the wicked problems we face. It was a thought-provoking couple of days.