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7 Questions to Move Your Nonprofit to Financial Sustainability

Financial sustainability seems to be the Holy Grail of the nonprofit sector. Everyone wants it, but few know how to find it.

But it doesn’t have to be that way.

I firmly believe that financial sustainability is attainable for any nonprofit, as long as board and staff are willing to ask the right questions and do the hard work.

In fact, there is a roadmap to nonprofit financial sustainability, which includes several components. Because a nonprofit’s board, their strategy, their vision and mission, their marketing efforts, their programs, all contribute to or detract from their ability to attract and use money well.

But often nonprofits struggle in so many areas (disengaged board, poor fundraising results, non-existent strategy, ineffective marketing) that it can be difficult for a nonprofit leader and board to know where to start in order to become more financially sustainable. So I’ve developed a list of questions that assess where a nonprofit is on that path and where staff and board should focus their efforts.

This mini-assessment of 7 questions is listed in priority order, so once one area is addressed, you can move on to the next. For example, you may have your “Vision” and “Strategy” all figured out, so next you need to tackle “Program Delivery,” and so on.

So to see where your nonprofit is on the path to financial sustainability, answer these 7 questions:

  1. Long-Term Vision: Do board and staff agree on the ultimate goals of the organization — what you are trying to accomplish in the world? If not, then articulate your Theory of Change, which will help you come to a shared long-term vision.

  2. Strategy: Have board and staff together articulated a strategy — how you will marshall staff, volunteers, programs, activities — to move toward that long-term vision? If not, then create a multi-year strategic plan that ties your long-term vision to the activities and resources necessary to get there.

  3. Program Delivery and Impact: Do your programs work with the people you hope to benefit or influence in your long-term vision? If not, review your target populations and analyze each of your programs’ ability to move toward your vision.

  4. Financial Model: Have you articulated how money will flow into the organization and how that money will be used to make your long-term strategy a reality? If not, then develop a long-term financing plan that articulates how much money you need, over what timeframe, and the tasks in each revenue area necessary to meet (and hopefully exceed) those expenses.

  5. Staff Effectiveness: Do you have the right staff expertise structured in the right way to deliver on your strategy? If not, analyze your staffing structure and capabilities and how they relate to what you need.

  6. Board Engagement: Do the vast majority of your board members embrace your mission and actively participate in moving it forward? If not, set clear expectations, establish accountability, and engage them one-on-one.

  7. External Relationships: Do you have the right partnerships and engagement with the right external people and organizations necessary to deliver on your strategy? If not, seek to understand the world outside your walls, develop a marketing strategy, and build the networks you need.

If you are interested in a deeper analysis of how to move your nonprofit forward on the path to financial sustainability, check out the Financial Model Assessment I conduct for clients.

Photo Credit: Jeff Power

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Speak Out and Be Counted

I had an ache in the pit of my stomach all weekend long. I get a stomach ache whenever something is very, very wrong. Friday’s Executive Order banning immigrants from seven Muslim-majority countries is so very wrong, and so fundamentally un-American.

I am an American because my ancestors at one point or another immigrated to this country because they thought it would offer better opportunities and/or more tolerance. And I have spent my career working in and with the nonprofit sector, which is fundamentally about giving voice and support to the oppressed.

For these reasons (and so many more) this executive order is completely anathema to me.

By yesterday my stomach was aching for some sort of salve. So here’s what I did:

  • I called my members of Congress — both of my Senators and my Representative, at both their D.C. and local offices to ask them to stand up against this immigration ban. And I will continue to do so every day. Several of their voicemail boxes were already full, so I took some comfort in the fact that others are as upset as I am. But I will not rest on that knowledge, I’ll keep trying to leave my own message.

  • I donated to the ACLU, who by the way, received $24 million in online donations from 350,000 people over the weekend (six times their normal annual online donations!). So again, there is comfort in numbers.

  • I emailed a message of solidarity to my client, the Muslim Public Affairs Council, which is an amazing group working tirelessly (and much harder these days) for the civil rights of American Muslims.

  • I’m continuing to follow resistance hashtags on Twitter like the 80+ alternative Twitter handles for the various government agencies that are no longer allowed to Tweet information at odds with the administration, and the #ThisIsYourLand and #Resistance hashtags, as well as the growing social movement of protest and resistance.

  • I will continue to work to encourage the nonprofit sector — the moral compass of this great country — to be bold and speak out against anything that goes against the fundamental values of our country.

As Charles Blow wrote yesterday in the New York Times:

“America will not stand for this, so if obsequious conservative politicians or lily-livered liberal ones won’t sufficiently stand up to this demagogic dictator, then the American people will do the job themselves. Over the weekend, protesters spontaneously popped up at airports across the country to send an unambiguous message: Not in our name; not on our watch. It is my great hope that this will be a permanent motif of Trump’s term. If no one else is going to fight for American values, it falls to the American people themselves to do so.”

Yes, that is right. As Americans, we’ve been training for this since we had our first civics lesson back in middle school.

And as social change leaders, we all have an obligation to speak up.  As Greg Oliphant put it “There are truths that need to be spoken now, spoken out loud and unapologetically by people who know them to be true. Spoken with love, yes, but also fierce conviction…They are where we as a sector…must find our voice, in holding them out not as criticism but as the True North we still must point towards, the star we still see and hold steady in our gaze despite attempts to obscure it.”

If you too felt sickened by the events of this past weekend, get engaged — speak out and be counted. Do not sit back and wait for someone else to do it.

Not in our name. Not on our watch.

Photo Credit: Miraage.clicks

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5 Nonprofit Trends to Watch in 2017

It’s that time of year again, where we take a look back at the year drawing to a close, and forward to the year ahead. We all know that 2016 was rough (and if you want to wallow for a minute or two, check out John Oliver’s cathartic send off to 2016).

But I am ever the optimist, so I’m hopeful that 2017 will be better. In particular I think the upheaval of this year provides an opportunity for social change to mobilize. So 2017 could be an interesting year to watch.

Below are what I predict (hope) will happen in 2017. But I make no promises.

And if you want to see how I did in past years, you can check out my 5 Nonprofit Trends to Watch lists from 2011, 2012, 201320142015, or 2016.

  1. An Expanding Definition of Equity 
    As philanthropy continues to agonize over the presidential election and what it means and what philanthropy missed, I think there may be a reckoning that philanthropy’s growing interest in equity and inclusion must expand to include those in the rural, working class who feel they’ve been left behind. Whether this means increased philanthropic investments in “red” America, it remains to be seen, but I believe philanthropy will seek to understand how they might help to heal a divided nation.

  2. Greater Use of Networks and Movements for Social Change
    There is no doubt that social change must cross organizational boundaries in order to become systemic, so nonprofits will (I hope) increasingly recognize that they must break down their walls and become more networked in order to achieve their goals. From social movements like #BlackLivesMatter and the widespread networks working on LGBTQ rights, social change leaders will increasingly recognize that they cannot go it alone. There will be more organized efforts to marshal resources toward larger social change.

  3. Growing Recognition Among Millennials of the Role of Institutions in Social Change
    But networks and movements are not enough — institutions also play a critical role in social change. And Millennials in particular tend to be anti-institution — we saw their distaste for political institutions in their low voter turnout rates in November’s election. So those Millennials pushing for reforms will need to figure out how to connect their movements and networks to the requisite political and social institutions.

  4. More Nonprofit Advocacy
    Continuing to be squeezed by shrinking government dollars and a challenging political environment, nonprofits will increasingly recognize the need to embrace advocacy as a social change tool. Formerly worried about jeopardizing the legal status of their organization, nonprofit boards and staffs will become more willing to take the risk and work to help policymakers and their influencers understand the need for their social change work.

  5. More Analysis of What Nonprofit Financial Sustainability Requires
    This one is truly optimistic, I know, but I really believe that the discussions about the Overhead Myth and funding a nonprofit’s real costs will give way to a larger conversation (and research) around what it takes to create financial resilience in the nonprofit sector. Funders and nonprofit leaders are slowly starting to recognize that they must invest in financial models in order to be successful. So I’m hopeful that there will be a growing body of research into what works and what doesn’t, more case studies about nonprofits that have found financial sustainability, and a growing push to wield the money sword in the nonprofit sector.

Photo Credit: James Vaughan

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Thursday, December 8th, 2016 Advocacy, Innovators 1 Comment

The Future of the Nonprofit Sector [Slideshare]

I’m excited to be heading to Pennsylvania next month to speak at the 2016 Nonprofit Day Conference. My keynote address for the conference will be “The Future of the Nonprofit Sector.” I wanted to share an abbreviated version of the speech with you here via the Social Velocity Slideshare library.

In my mind, there are some fundamental shifts happening in the sector that will be important to watch. They include:

  • Increasing competition in the space
  • A greater demand for results and social change
  • An increased use of advocacy to achieve that change
  • A move to more “networked” approaches
  • Less “starving” nonprofits of their operational needs
  • And (of course) a move from fundraising to financing

These are interesting times, and they hold tremendous opportunity, I think, for the social change sector.

If you want to see other Social Velocity Slideshares go here. And if you want to learn more about inviting me to come speak to your group or event, check out my Speaking page.

The Future of the Nonprofit Sector from Nell Edgington

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Social Change Requires a New Nonprofit Leader

leadershipNote: Earlier this month I was asked by the Philanthropreneurship Forum to write a piece about nonprofit leadership, which follows. The piece originally appeared on the Forum here.

The new millennium has been a difficult one. A struggling global economy, threatening climate change, crumbling education and healthcare systems, and a widening income gap are just a few of the social problems we face. And as our social challenges mount, and the government increasingly offloads services, the burden shifts to the nonprofit sector.

Now more than ever nonprofit leaders must step up to the plate. In fact, it is time for a new kind of nonprofit leader, one who has the confidence, ability, foresight, energy, and strength of will to find and deliver on solutions. It is time we move from a nonprofit leader who is worn out, worn down, out of money and faced with insurmountable odds, to a reinvented nonprofit leader who confidently gathers and leads the army of people and resources necessary to create real, lasting social change.

In my mind, here is what the new nonprofit leader should look like:

Unlocks the Charity Shackles
“Charity” is more than a word, it’s a destructive mindset that keeps the work of social change sidelined and impoverished. “Charity” harkens back to the beginnings of philanthropy, which was largely the purview of women and viewed as tangential to and less valuable than the more important “business” of the male-dominated world. While charity was an afterthought, social change is rapidly becoming an integral part of the economy. As social problems mount, we must shift from the “charity” of our predecessors to an understanding of social change as part of everything we do. And nonprofit leaders must confidently and assertively articulate the critical importance of their work and why it requires real investment, because social change is about changing larger systems. So it takes real, significant investment of resources, not the pennies that charity requires.

Moves From Misplaced Gratitude to Impregnable Confidence
In the nonprofit sector there is such a pervasive power imbalance that misplaced gratitude, or gratitude for acts that are actually NOT helpful, often gets in the way of real work. If a nonprofit leader acts grateful when she should actually voice frustration or disappointment (with a delinquent board member or a meddlesome funder), she is cutting off authentic conversations that could result in more effective partnerships. Nonprofit leaders must rise from bended knee with confidence in themselves, their staff, and their social change work to articulate what they really need. To be truly successful, a nonprofit leader needs a board that will move mountains, donors who fully fund and believe in the organization, and a staff that can knock it out of the park. And they get there by being honest about, not grateful for, the roadblocks in the way.

Lives, Breathes and Leads Strategy
Real social change is only a pipe dream if it is not connected to smart strategy. To get there a nonprofit leader must ask board and staff to answer some key strategic questions like:

  • What change do we want to create?
  • Where do we fit in the external environment?
  • How do we measure if that change is happening?
  • What are the right activities to get to there?
  • What is the most sustainable financial model to get there?
  • What people and networks do we need with us?

These are not easy questions, and finding the right answers is even harder. But that is true leadership.

And part of that strategy may involve a (formerly feared) move into advocacy. 501(c) 3 organizations have long been told to stay out of politics. The myth is that charity is too noble to be mired in the mess of pushing for political change. But the fact is that simply providing services is no longer enough to solve the underlying problems. Nonprofits are increasingly recognizing that they can no longer sit by and watch their client load increase while disequilibrium grows. Nonprofits must (and many already are) advocate for changes to the ineffective systems that produce the need for their existence.

Uses Money as a Tool
Without money, a compelling, inspiring, world-changing vision for social change is only a sentence on paper. As much as we might like to deny it, nonprofits exist in a market economy, and without a smart plan for how a nonprofit will secure and use money there is no mission. So instead of dreaming up magic bullet fundraising schemes, a nonprofit leader must develop an overall financial model for her work that fully integrates with the organization’s mission and core competencies. And because money is so central to mission, you cannot make decisions about the organization, about programs, about staffing, really about anything without understanding the financial implications of those decisions.

Embraces the Network
If instead of building an institution, a nonprofit leader built networks, she could be much more effective at creating long-term social change. A true leader leaves her ego, and the ego of her organization aside in order to assemble all necessary resources (individuals, institutions, funding) to chart a path towards larger social change. Instead of thinking just about her organization, her staff, her mission, her board, her donors, the nonprofit leader must analyze and connect with the larger marketplace outside her walls, the points of leverage for attacking the problem on a much larger scale than a single organization can. A nonprofit leader understands that the network approach — particularly for nonprofits that are so resource-constrained — can create a much larger effect than a single entity can.

I believe that what separates great leaders from mediocre leaders is an ability to inspire others to greatness beyond what they thought possible. A true leader asks us to rise above our current circumstances – and in the nonprofit sector where more and more is being asked of organizations with less and less, those circumstances are often dire — to do more and be more than we ever thought possible. It is with that kind of real leadership that lasting social change can happen.

Photo Credit: Chuck Abbe

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Understanding Movements for Social Change: An Interview with Sean Thomas-Breitfeld

SeanT-B_headshotIn today’s Social Velocity interview, I’m talking with Sean Thomas-Breitfeld, Co-Director of the Building Movement Project, which brings a social movement perspective to research on nonprofit organizations. Prior to joining the BMP staff, Sean spent a decade working in a variety of roles at the Center for Community Change, where he developed training programs for grassroots leaders, coordinated online and grassroots advocacy efforts, and lobbied on a range of issues. Before joining the Center, Sean worked as a Policy Analyst at the National Council of La Raza, where he developed research and lobbied on issues related to employment and income security.

You can read interviews with other social change leaders here.

Nell: What is the role of leadership in movement and network building? How do you balance the need for organic and distributed power with the need for someone (or multiple someones) to provide vision and marshal resources?

Sean: I think it’s important to start by teasing apart the concepts of movements and networks, or any other organizational structure/formation that might be the “cool new thing” in the nonprofit sector at any point in time.

I’m pretty traditional (admittedly even rigid) when it comes to what makes a movement. For me, movements are bigger than any organization, coalition, network or campaign could ever hope to direct or contain. That’s not to say that organizations – and networks of organizations – don’t have a role in supporting movements, but nowadays it seems like everyone’s talking about movements, but too often in a way that’s disconnected from the kind of fundamental social change that feminist, anti-war, civil rights movement leaders did a generation ago.

If an organization is trying to build a campaign or network to support its mission, generate a ton of subscribers and followers, and raise their profile as a “legitimate” advocate on an issue, that’s great. But that’s a campaign. Not a movement.

I spent a chunk of my career working on campaigns, and maybe it’s because I was trained by organizers, but we were clear about the difference between our measurable campaign deliverables (whether a policy was won or lost, how many people turned out for an action or march, etc.) and the more intangible aspiration that our organizing would spark some movement energy on the ground.

Part of the reason that my organization holds up leadership as a key focus area for our research is that we recognize that organizations, networks, movements need strong leaders and also need strong collective leadership. So when we think about the balancing act, it’s not that distributed power and vision / resources are at opposite ends of a scale. In fact, from a movement perspective, distributed leadership actually enhances the movement’s vision and brings more resources to bear on the fights the movement takes on. This is not to say that there aren’t struggles over leadership and between individual leaders/personalities… all of our organizations are made up of human beings interacting with each other, so conflict is going to be inevitable. The challenge is how to make those tensions and conflicts generative.

Nell: As you look at two current social movements — Black Lives Matter, and student protests on college campuses — what are your thoughts on their methods? How successful do you think they have been and will be in the future?

Sean: I think we’re in a very exciting movement moment. When we look back on the 1960s, that decade occupies a special place in our collective imagination because we have enough distance to see how specific moments and events and sparks connect to each other. I’d suggest that the rise of Black Lives Matter is connected to the increasing visibility of student protests on college campuses. And not just in the obvious examples where Black Lives Matter was a rallying cry. Young people play an important role in movements, and they always have.

I worked for several years supporting campaigns to reform our country’s broken and inhumane immigration policy. And young people – whether they were in high school or on college campuses or working to support their families – have been critical to the movement for immigration reform. When I had the privilege to be in the room with young folks to strategize about actions and protest and tactics, there was a ton of creativity and fun that I – as someone in my thirties – had forgotten or lost touch with. I think that the turn we saw towards civil disobedience as a strategic choice was informed by the impatience of young people with an insider political game that wasn’t working for communities.

Progressive activists have gotten back in touch with direct action and civil disobedience in the last few years, and I think that’s an important tool / method to have at our disposal. The reason we build movements is because the polite, official ways of making change haven’t worked. And the way to break through is to assert that Black Lives Matter, or to come out as undocumented and unafraid. The willingness of activists to put their bodies on the line to shut down traffic and disrupt the status quo isn’t just about getting media attention; it’s about demonstrating a commitment to change that inspires others to take their own steps in the ongoing struggle for justice.

To come back to the movement vs. network distinction for a moment … Patrisse Cullors – one of the three women who created #BlackLivesMatter – recently posted a super insightful piece titled “We Didn’t Start a Movement, We Started a Network.” And in that she writes about her concern when the media started referring to the “Black Lives Matter movement” because, as she put it “movements don’t belong to any one person, and we knew that this movement wasn’t started by us.” That commitment to recognizing and lifting up the many amazing organizations doing critical on-the-ground organizing is what makes this movement moment feel really different and important, and hopefully lasting. I think there is something to the fact that many of the most visible leaders today are women who are unapologetically black and feminist. I think the movement for Black lives is a game changer, and I’m really excited to see the movement continue to have more success in the future.

Nell: Because the nonprofit sector is so resource-constrained and competition for dollars is so stiff, there is often a perceived risk to building networks. But how can (and why should) nonprofits overcome this and become more networked?

Sean: That’s an interesting observation, because it seems to me that the resource incentive is for organizations to join networks. Philanthropy doesn’t seem to want to invest in small, local organizations that are doing their own thing. The tendency seems to be for funders to give big grants to national networks and count on them to disperse the money to groups on the ground. Now, I’ve worked for national intermediaries my whole career, so I have seen the way that strategy works to support national campaigns that are disciplined and strategic. But I know that there’s lots of concern – especially on the part of people of color led grassroots organizations – that the “trickle down” strategy isn’t working.

Part of the piece about competition for resources is about leadership, and specifically who is leading the networks versus who is leading the small grassroots organizations that comprise networks. Last year, I worked with some colleagues on a report titled #BlackWorkersMatter, and one of the things that came out from the interviews I did with leaders around the country who are using community organizing as a strategy for addressing the jobs crisis in Black communities is that there are a lot of biases playing out in our sector that leave Black-led – and people of color led organizations in general – at a disadvantage for funding, visibility, all of the currencies that give an organization power and stability right now.

Already, we know from the Daring to Lead survey of nonprofit EDs, that the top-level leadership of the sector is overwhelmingly white. And I think we have to grapple with what it means if the leadership of our networks doesn’t match the demographics of the constituents who come to our organizations for support. BMP just launched a survey on Nonprofits, Leadership & Race, and I’m really curious about what the data will reveal in terms of people’s experiences and perceptions about how implicit biases might be playing out inside of organizations and the nonprofit sector.

Nell: What is or should be philanthropy’s role in building social movements and networks? And is philanthropy currently helping or hurting these efforts?

Sean: I think funders can and definitely do play a role in supporting both social movements and networks, but since investing in networks seems like a clear priority already, I’m going to focus on what funders should do to invest in social movements.

I think the first – and most important – thing a foundation should do if they’re interested in supporting social movements is invest in grassroots organizations that are doing authentic base building, popular education and leadership development. And give them general support dollars for multiple years to do that work. Foundations also should recognize that the slow work of organizing may not yield the kind of metrics and deliverables that have become so central to how we evaluate campaigns.

Beyond that commitment to organizing, foundations can use their unique vantage point to identify organizational leaders and strengthen connections between them. Obviously, money directly to the organizations is important, but sometimes the funding is needed to convene people to discuss, debate and disagree about the movement’s vision and strategy. Having philanthropy support relationship-building between leaders and organizations is really important for any movement ecosystem.

Photo Credit: Building Movement Project

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The Network As Social Change Tool: An Interview with Anna Muoio

Anna Muoio face2In today’s Social Velocity interview, I’m talking with Anna Muoio, an expert on the use of networks in social change efforts.

At Monitor Institute, a part of Deloitte Consulting, Anna leads the practice on how to drive large-scale social change through galvanizing networks around a shared agenda. She has led aligned action efforts for organizations such as New Profit, Skoll Foundation and Venture Philanthropy Partners. Anna is the author of GATHER: The Art and Science of Effective Convening; ENGAGE: How Funders Can Support and Leverage Networks for Social Impact; and most recently, “Wicked Opportunities” in Business Ecosystems Come of Age.

You can read interviews with other social change leaders here.

Nell: Is the idea of a network entrepreneur new in the world of social change? Or how do you think the use of networks is different now than it has been in the past?

Anna: The idea of an individual who works, often tirelessly, to mobilize diverse stakeholders to tackle a tough problem by developing a coordinated plan of attack is not new by any means. Funders and practitioners have been galvanizing networks to address large scale challenges for decades. But the term “network entrepreneur” is new. I heard it recently from two practitioners, David Sawyer and David Ehrlichman from Converge, who are working with network leaders in California.

Over the years we’ve used several terms to describe this type of person: network weaver, network CEO, system leader, tri-sector athlete, Chief Resilience Officer, ecosystem integrator, to name a few. What is changing, though, is the acceptance of why developing the capacity to lead and engage in problem solving through networks is important—as well as an appreciation for what it takes to do so. Increasingly, we’re seeing a shift from the organization as the primary unit of change to the network as a viable means of achieving social impact goals.

Nell: Why do you think nonprofit leaders should embrace the idea of a network entrepreneur? What makes this approach so attractive to social change efforts?

Anna: It’s not just nonprofit leaders who should embrace the idea of using networks to drive systemic change. The tough problems we face as a society have no consideration for sector or issue boundaries—and can’t be solved by leaders from any one sector. Business and government leaders have just as important a role to play in cross-sector social problem solving. And for companies, working through networks is becoming a powerful way to integrate social impact into their core business strategy rather than isolate it within a corporate social responsibility initiative. This is where a lot of exciting activity is happening globally.

We’ve identified five types of networks that create that intersection between social impact and business value—and in which companies are playing critical roles. There are those networks which can directly benefit a company’s core business and are designed for addressing strategic goals such as stewarding natural resources, enabling market-based solutions and raising industry standards. Then there are networks that tend to more indirectly benefit a company’s core business; and these focus on aligning solutions within local communities and mobilizing action around large-scale solutions. We are seeing bold cross-sector experiments in many arenas–where social impact networks are successfully engaging the private sector to tackle a range of challenges while also meeting specific business needs, such as: effectively stewarding the forests of the Santa Cruz Mountains in California; redesigning the global seafood supply chain to preserve fisheries; surfacing new market-based solutions for building a healthy and sustainable food system worldwide; improving access to new and underused vaccines for children living in the world’s poorest countries; and enabling communities to create local education ecosystems to support children and youth from cradle to career.

I don’t want to put an unrealistic sheen on the power of networks to solve all problems. Working in this way is one of many important tools in our collective problem-solving toolkit. What networks do, however, is allow us to pursue solutions that would be harder to attain in other ways. A network approach aligns the actions of a diverse set of stakeholders to tackle a larger piece of a problem than by working in isolation; diversifies risk and spreads bets across many experiments; enables innovation by building a platform where different voices can come to the table to shape new solutions; and ultimately, helps build a resilient problem-solving ecosystem where a dense web of relationships provides the resilience necessary to adapt to new challenges and opportunities as they arise. These qualities are harder to get through one-to-one partnerships or from the efforts of a single organization. A network builds a platform that can launch a portfolio of interventions and simultaneously pull many levers for change. That’s what makes them attractive for social change efforts.

Nell: Networks are often organic and can become ineffective if they are overtaken by a single person or entity, yet they also require leadership to be successful. How does a network balance the need for leadership with the need for organic growth?

Anna: Walking the right “leadership line” is certainly critical in a network context; but that’s not to say that networks don’t need focused and intentional leadership. Network leadership requires a different mindset than operating in a traditional organization. It’s more loosely controlled and emergent than top-down and planned. Decision making is shared rather than concentrated in one person. Insights come from the collective rather than from individual “experts.” Power and commitment come from trust among many not from mandates from the C-suite.

In this way, leadership is just one of the many attributes to factor into a network’s design. Through our own work with networks, we’ve identified eight particularly common ways that they can vary to suit different circumstances—and enable or hinder growth. Besides the important leadership attribute, network entrepreneurs need to consider others such as a network’s purpose, alignment, governance, sector, orientation, size and geography.

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Our Axes of Collaboration (to the left) is a useful tool for any network entrepreneur as they think about the foundational DNA of a network—and how to design one to best match the type of problem it’s meant to tackle.

For instance, if you’re a network like REAMP, now with over 165 participating organizations focused on the ambitious goal of reducing carbon emissions 80% by 2050 across the Midwest, you won’t want to design a network that “lives” more on the left side of these axes: one with distributed leadership, informal governance, that’s more learning than action oriented, and has minimal alignment. You’ll never hit that goal with that kind of design. Leadership is a critical component of any network; but so are the other factors that will either help support or inhibit a network’s growth. Considering all these dimensions—and then designing appropriately—is essential.

Nell: When you look at some of the social movements active today — like Black Lives Matter and the protests on college campuses — how does your research on networks help inform your understanding of whether or how successful you think those efforts will be?

Anna: I won’t try to predict the future of these movements. But through our work helping design and launch networks, we know that we need to apply a different frame to evaluate a network’s success. We’ve been influenced by the work of Peter Plastrik and Madeline Taylor who are pushing the field’s thinking around how we measure the impact of a network. For a network, it’s important to understand—and to be able to measure—not just the effects, what a network achieves in terms of outcomes, but also to measure its operations, its “internal health” and how it runs.

We segment network effects into three areas:

  1. Beneficiary effects (the outcomes and impacts on the people a group aims to serve),
  2. Idea dissemination (the spread and adoption of language, concepts or practices a network supports) and
  3. Field building (changes we’ve promoted in the development of the fields in which we work).

We then segment network operations into its structure and health and measure things such as the network’s membership, connectivity, activities, resources, infrastructure and value proposition. Many years ago we developed a diagnostic tool to evaluate a network’s effectiveness. Many of the elements to consider may be highly relevant to those working more directly with movements.

Ultimately, a network’s—or movement’s—success depends on a variety of factors. And getting smart about how to track them in order to refine, recalibrate or redirect the network’s strategy is what matters. Unfortunately, there’s not one solitary variable to evaluate the multi-dimensional nature of a network that’s built to tackle deeply systemic and complex challenges. I wish it were that simple, but it’s not.

Photo Credit: Monitor Institute

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Is The Nonprofit Sector Really Broken?

There was a bit of a dust up in the (social change) Twitterverse yesterday. Ryan Seashore from CodeNow wrote a post on TechCrunch arguing that the majority of nonprofits are “broken,” and should act more like for-profit startups in order to create impact. The post follows a similar line of other arguments over the years (most recently Carrie Rich’s argument that nonprofits should all become social enterprises) that the nonprofit form is so dysfunctional that it should be tossed out. But there is a real danger to this idea of abandoning the nonprofit sector.

As he often does so well, Phil Buchanan, from the Center for Effective Philanthropy, shot back against Ryan’s post, Tweeting (among other things):

Twitter

Debates like these are crucial not because of the entertainment value (although I do love good drama), but because they force us to uncover and analyze our underlying assumptions. Yesterday’s debate, and others like it, which take the nonprofit sector to task for being inefficient, broken, unbusinesslike, lay bare some false and destructive assumptions about nonprofits and about social change in general.

Ryan sees nonprofits as aging dinosaurs with “too much overhead, too much bureaucracy, and a lack of focus on impact. Everything feels slow.” But for real change to happen you have to integrate the institutions that already exist with the networks, or “startups,” that want change, as I discussed in an earlier post. The two (institutions and networks) must work together. Ryan’s argument that nonprofits need to be more like startups is fundamentally flawed because if everything were a startup, change wouldn’t happen.

To quote David Brooks from a recent The New York Times piece, “Post-Internet, many people assume that big problems can be solved by swarms of small, loosely networked…social entrepreneurs. Big hierarchical organizations are dinosaurs…[but] this is misguided…Public and nonprofit management, the stuff that gets derided as ‘overhead,’ really matters. It’s as important to attract talent to health ministries as it is to spend money on specific medicines.”

To be sure, in his blog post Ryan outlines some areas where many nonprofits could improve (becoming more focused, continually innovating, diversifying revenue sources, thinking big), but these are best practices that any organization (startup or established institution, for-profit or nonprofit) should embrace. It is simplistic and misguided to think, as Ryan writes, that “the nonprofit world must embrace the nimble ways of successful startups to become more effective, and do better.” I know its not sexy, but real social change is much more complex than startup versus institution.

So let’s move on from this either/or mentality. Effective social change requires institutions AND networks, it requires Millennials AND Boomers, it requires startups AND established organizations, it requires public AND private money (and lots of it), and it requires for-profit and nonprofit solutions. We are wasting our time (and our keystrokes) by creating false dichotomies. Let’s work together toward strategic, sustainable social change.

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