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nonprofit collaboration

10 Great Social Innovation Reads: August

Since I was on vacation for a couple of weeks in August and pretty much unplugged, I’m probably not qualified to list the 10 greatest reads in social innovation for the month of August, but I’m still going to give it a shot. As always, please add what I missed to the comments.

You can also read the lists of Great Reads from previous months here.

  1. Guest blogger on the Tactical Philanthropy blog, Jed Emerson, a pioneer in the impact investing arena, argues that impact investing is at risk of missing a key opportunity to move the field forward.

  2. Strategic finance is one of the hardest things for many nonprofit leaders to master, but also one of the most critical. Nonprofit Finance Fund explains how to approach it.

  3. Sea Change Capital Partners and Lodestar Foundation are partnering to create a new fund to pay for nonprofit collaboration and mergers. A pool of merger money is a great new addition to what is a pretty big hole in the nonprofit capital market.

  4. From the Harvard Business Review blog comes the argument that sometimes it can be good for business to fire some customers. This concept should apply to nonprofits’ donors as well.

  5. One of the biggest hurdles to nonprofit performance measurement is a lack of money to make it happen. On the Social Currency blog, Angela Francis explains how nonprofits can find the money for evaluation through capacity capital.

  6. The biggest news in August was nonprofit Jumo’s merger with for-profit GOOD. Antony Bugg-Levine (who was just announced as the new CEO of the Nonprofit Finance Fund yesterday) explains how this merger is just the beginning of a real blurring of sector lines to come.

  7. On August 24th, US Secretary of Education @arneduncan held a Twitter Town Hall to answer questions about America’s public education system and his ideas for reform. You can see the Tweets at #askarne or read the highlights here. He plans to hold another Twitter Town Hall soon.

  8. The Future Generations blog offers a great framework and examples of that often touted, but rarely understood, concept: “scale.”

  9. In the wake of Steve Jobs’ resignation from Apple, Cliff Kuang offers a reflection on Jobs as a supreme innovator and great user of technology.

  10. From the tech blog, A Smart Bear, comes a lesson for entrepreneurs (and social entrepreneurs too) when being an expert is harmful.

Photo Credit: afunkydamsel

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The Perils of Nice

This post originally appeared on the Change.org Social Entrepreneurship blog last spring.

The nonprofit sector often suffers from a propensity toward niceness. Indeed, according to¬†a recent study by researchers at Stanford and two other business schools, nonprofits are perceived as “warm, generous and caring organizations, but lacking the competence to produce high-quality goods or services and run financially sound businesses.”

In other words, we think they are nice — but not competent.

But this perception stems from a reality that is often imposed on the sector. Nonprofits are encouraged to collaborate instead of compete, hold onto under-performing staff, accept martyr-like salaries, smile and nod when funders push them in tangential directions and keep quiet when government programs want the same services at a lower price.

This demand that the sector play “nice” is the result of (at least) two things. One is its focus on the social. The sector exists to address and (hopefully) solve social problems. Thus, by definition, it’s socially oriented and has a tendency toward an inclusive, consensus-based approach to doing business. Secondly, the sector is structured so that a nonprofit has many more constituents to answer to than its for-profit counterparts do.

For example, nonprofits have two customer groups, instead of the one customer for-profits have: 1)those who benefit from the services they provide (the clients) and 2)those who pay for those services (funders). And nonprofits are led by volunteer committees (board of directors) that need to be corralled. The end results is that funders, volunteers, board members, staff and clients must somehow be brought together and moved toward a common direction.

This demand to collaborate, build consensus — and play nice — probably helps explain the label of inefficiency that often is attached to the sector.

But in order to innovate and work toward real solutions, in order to get out from under consensus-based mediocrity, nonprofits need to break free from the niceness trap. They need to get meaner, uglier, messier.

In other words, they need to:

  • Make an honest assessment of their core competencies, competitors and consumers so that they understand and can articulate where they fit in the marketplace — and make a market play if they can deliver a competing service more effectively. The end goal is to solve problems, not get along, right?

  • Take more risks in how they deliver solutions and how they fund them. The status quo is not enough, so think big and act accordingly.

  • Say no to funders who demand new programs or changes to programs that detract from the organization’s theory of change or core competencies.

  • Diversify revenue streams so that they are not beholden to any one funder or funding stream.

  • Demand that board members invest significant time and money in the organization, or get out.

  • Fire under-performing staff. This is such a taboo in the sector, but with limited resources and mounting social problems to be addressed, do we really have time to invest in people who can’t deliver?

  • Be brutally honest with funders, board members, others about the true costs of running operations effectively and don’t apologize for, or hide, administrative expenses

  • Create a bold strategic plan that will drive the organization toward social impact and sustainability, not mediocrity.

Enough with the nice. If we’re really going to get things done, we have to take a stand, be bold, be honest — and do the right, hard thing.

Photo Credit: eyesplash Mikul

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