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nonprofit leadership

How Do We Fund Nonprofit Leadership Development?

LeadershipSomething pretty exciting is going on. Perhaps I’m an eternal optimist, or I’m suffering from confirmation bias, but it seems to me that more funders are starting to talk about investing in the capacity of nonprofits, particularly around nonprofit leadership development.

The Stanford Social Innovation Review kicked off a new blog series this month focused on the topic. Over the next three months, six foundation leaders will blog about why they have made investments in the leadership development of their nonprofit grantees and what the return on investment has been.

This is phenomenal because the more we talk about and demonstrate the return on investment of nonprofit leadership development, and really of any capacity investments, the more likely we will be to see other funders follow suit.

As Ira Hirschfield, president of the Evelyn and Walter Haas, Jr. Fund, points out in the inaugural post in the new SSIR series, less than 1 percent of overall foundation giving went to leadership development between 1992 and 2011, while the private sector allocates billions of dollars to it.

Why are we not investing in our nonprofit leaders? If we truly want to create change to some of our most pressing social issues don’t we need the strongest, most effective leaders possible?

As Hirschfield puts it so well:

Foundations ask a great deal of the organizations we support…in short, we hope grantees will deliver transformational results for the people and places they serve. So it’s striking how seldom we back that up with funds to help organizations develop and strengthen the ability of their leaders to meet those high expectations. People are not born with everything it takes to manage and motivate a team, build coalitions, and lead change…Leaders who have the opportunity to reflect on their strategies and hone their skills make better choices, develop innovative solutions and forge stronger collaborations. This is what leadership development is about—and to the extent that foundations decide it is important and fund it, then we and our grantees will be better positioned to achieve our goals for impact.

In other words, foundation funding will go further if funders also invest in the leaders of those organizations they fund.

It seems like a no-brainer. And it is a no-brainer in the for-profit world. But as we so often do in the nonprofit sector, we are selling the sector, and its leaders short.

But it is not enough (nor are we anywhere near it anyway) for funders to understand the need for investing in nonprofit leaders. Nonprofit leaders themselves need to stop apologizing and start demanding (in a nice way!) investment in their own capacity. And leadership development is only one of the many areas in which nonprofits need capacity investment. Nonprofits also require fundraising expertise and staffing, program evaluation, technology and systems, and the list goes on.

So if we are to have any hope of moving this topic beyond the blogroll, nonprofit leaders and funders need to start having better conversations about what it will really take to accomplish their joint impact goals. Because if, at the end of the day, we are all looking to achieve more impact, then capacity to deliver on that impact must be part of the conversation.

If you want to learn more about capacity investments from both the nonprofit and funder sides, download the Power of Capacity Capital book, and if you want to learn more about nonprofit leadership, download the Reinventing the Nonprofit Leader book.

Photo Credit: Clinton and Charles Robertson

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Investing in Nonprofit Leadership: An Interview with Rick Moyers

Moyers-PortraitIn this month’s Social Velocity interview, I’m talking with Rick Moyers, vice president for programs and communications at the Meyer Foundation in Washington DC – a regional grantmaker that is nationally recognized for its capacity-building programs. Rick is a co-author of the Daring to Lead 2006 and Daring to Lead 2011 national studies of nonprofit executive directors, and has written and spoken extensively on executive and board leadership. He currently serves on the boards of BoardSource, the Alliance for Nonprofit Management, and the Community Connections Fund of the World Bank Group.

You can read other interviews in the Social Velocity Interview Series here.

Nell: You write a lot about nonprofit boards of directors. As a general rule, because they are volunteers, nonprofit boards tend to be pretty ineffective and disengaged from truly leading their organizations. Can the current structure of nonprofit leadership be made more effective? Or is there a better structure, and if so, how would we undertake such a fundamental shift in the sector?

Rick: We can’t give up on boards just because many boards are ineffective, any more than we can give up on public schools just because so many are struggling. And the fact that board members are volunteers doesn’t necessarily account for their disengagement—some of the most passionate and productive contributors to the nonprofit sector are volunteers.

But just because I’m not ready to give up doesn’t mean we can just keep doing the things we’ve been doing to improve boards, hoping our efforts will produce better results, and wringing our hands when they don’t. We’ve heaped so many expectations and roles onto the backs of boards that I’m not sure it’s possible for any board to fulfill all of them all the time. A good place to start improving things would be to become much more focused and pragmatic about what we expect from boards. A clear set of expectations – one that’s not simply a laundry list of everything we wish boards would do – would be a start. Along with the recognition that organizations need different things from their boards depending on their circumstances.

We need to recruit board members with at least as much thought and effort as we put into recruiting employees, if not even more given that board service is a multi-year and often multi-term commitment. I know board members who have been invited to join the boards of organizations with which they were completely unfamiliar after a 15-minute conversation with the chair of the nominating committee—or a casual lunch with the executive director. And then we wonder why they have a hard time engaging. If we recruited board members as if the job mattered and their selection was an important decision, perhaps they would start taking the job more seriously. We can’t give up on boards without doing a better job of trying to help them function better.

At the same time, there would be enormous value in trying out alternative structures and talking openly about whether they worked any better than the current model. My hunch is that alternatives are being tried out quietly, but we don’t talk about them much. I’d be interested in learning more about very small boards (four or five carefully chosen people), the impact of compensation on board member performance, boards with greater staff representation, and boards that are more democratic and representative of the constituencies and communities being served. I’m not confident in suggesting any of these as an alternative to current practice because I don’t think we know enough. But we don’t know enough because most organizations don’t believe they have permission to experiment (and maybe they don’t). There’s enormous pressure for “normative” behavior in governance, even though we know that normative behavior often produces mediocre results.

I don’t have a good answer for how we break this cycle, but I think we need a “learning lab” for governance practices. We need to be bolder in our experiments, and more open in sharing the results, even when they are unsuccessful.

Nell: The Daring to Lead studies that you co-authored with CompassPoint demonstrate a deep leadership crisis in the nonprofit sector – nonprofit leaders are burned out, planning to leave, and lack support for leadership development. Is more money for leadership development the answer, and if so, how do we get funders to understand the need and fund it?

Rick: More money is the answer, but not necessarily more money for leadership development. My take-away from this body of work is that chronic under-capitalization is at the root of executive director burnout and dissatisfaction. The problem is not just that organizations don’t have enough money for leadership development. They don’t have enough money for anything.

While I applaud funders that invest in leadership development—and the Meyer Foundation is among them—there’s also a danger that funder-driven leadership development programs become simply another demand on already overextended executive directors. Funders need to recognize the importance of leadership development, but also need a keen understanding of the financial and organizational constraints that have a profound impact on executive directors who may already be accomplished leaders. One of the lessons from my foundation’s experience is that large grants for leadership development can be hard to use when executives are facing so many other challenges and distractions, many of which are related to finances and fundraising.

Nell: Why is leadership development taken as a given in the for-profit sector, but taboo in the nonprofit sector? Why do we assume that nonprofit leaders should be able to go it alone? And how do we change that attitude?

Rick: In the for-profit sector, there are more vehicles for ensuring adequate capitalization and leaders have greater discretion over how they can use that capital, with the mandate of producing the greatest return for owners, investors, and shareholders. That said, it’s very telling that so many large companies spend freely on leadership development without questioning the return on investment, while nonprofit leaders are conditioned to question every penny spent on anything other than program delivery. Boards can be especially shortsighted in this regard, under-investing in current executive directors without considering the costs—in money, organizational reputation, and lost momentum—of an untimely transition. We need more evidence, both anecdotal and quantitative, of the ROI for leadership development in the nonprofit sector. Producing that evidence and telling that story will require resources, but I’m concerned that without that investment we’ll never be able to make a convincing case to boards and funders that are increasingly focused on evidence-based approaches.

Nell: Do you think as Millennials age into leadership positions in the nonprofit and philanthropic sectors they will fundamentally change nonprofit leadership? And if so, how?

Rick: While not wanting to sound cranky, I object on principle to making generalizations about a group of 80 million people as if they were a single thing. And as a member of Generation X, I also must point out that we’re the ones who are currently aging into leadership positions. What about us, damn it?

Crankiness aside, as someone who works with younger leaders every day, I have noticed some differences that hold promise for the future. Many in the rising generation are much more socially aware, passionate about social change, and optimistic that they can make a difference than I was at their age. They are choosing careers in the nonprofit sector with more thought and intention than previous generations. The dramatic increase in the number of academic centers and degree programs focused on the nonprofit sector and philanthropy over the past 20 years is producing accomplished young leaders with broad skill sets and considerable insight into nonprofit work.

I do notice a more conscious commitment to work-life balance, and more intentionality around achieving it, which I hope will help reduce burnout and abrupt departures of nonprofit executives. Just within the last six months, I’ve watched three younger executive directors transition out of their jobs because they were seeking greater work-life balance. The difference from what I’ve seen in the past is that these executives decided to leave after successful tenures of more than five years, and after working intentionally to develop a strong board and staff leadership team that could handle the transition. These leaders stepped down before they burned out, and handed off strong organizations that were prepared for the change. That’s very encouraging, and I hope it’s a trend.

A committed and talented cadre of younger leaders is already in the nonprofit leadership pipeline – not by accident, but because they want to be here. Daring to Lead and many other studies have highlighted the challenges inherent in being an executive director, so these younger leaders know what the role entails. And they still want to do it. I think that bodes well for the future, and I’m optimistic.

Photo Credit: Meyer Foundation

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5 Questions Every Nonprofit Leader Should Ask

nonprofit leaderOne 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:

  1. 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 organizationarticulates 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.

  2. 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.

  3. 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.

  4. 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.

  5. 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

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10 Great Social Innovation Reads: August 2014

social innovation readsBetween my own time away from social media in August, the general end of summer quiet, and of course, the glut of posts about the Ice Bucket challenge (of which I have already said my piece), my list of great reads in August is admittedly slim.

But there was some interesting debate, most notably about “strategic philanthropy” and about ratings agency Philanthropedia. Also, calls for more nonprofit leadership development and for nonprofit leaders to get out of their own way by taking the Overhead Pledge. Throw in a little Mark Twain, some sharing economy, and a dash of Millennial analysis and you have a pretty good month in the world of social change.

So below is my pick of the 10 best reads in the world of social innovation in August. For an expanded list you can follow me on TwitterFacebookLinkedIn or Google+. And you can see past months’ 10 Great Reads lists here.

  1. Leadership development is a woefully underfunded need in the nonprofit sector. Indeed from 1992-2011 only $3.5 billion of the nearly $287 billion dollars granted by foundations went to support leadership. In order to get more foundations investing in leadership development, Rusty Stahl offers case studies of 9 foundations who already do.

  2. In the summer issue of Stanford Social Innovation Review, the lead article “Strategic Philanthropy for a Complex World” caused quite a stir in the philanthropy world with many arguing that there is not much new there. In August, Alliance Magazine ran a series of editorials by philanthropy leaders as counterpoints. Most interesting among them was Avila Kilmurray’s, former director of the Community Foundation of Northern Ireland, response, in which she said “Can we not just recognize that when any funder sets her/himself the task of addressing complex issues…there needs to be provision for continuous consultation, practice, reflection and change?”

  3. An interesting article in the New York Times paints the Millennial generation as a very communal-minded one, where “the highest value isn’t self-promotion, but its opposite, empathy — an open-minded and -hearted connection to others.” From working, to eating, to shopping it seems Millennials bake social into everything they do. How will the world be different if that holds true as they age?

  4. Writing in Forbes, Tom Watson asks whether nonprofits should participate in GivingTuesday. As he puts it, “Is #GivingTuesday a well-meaning marketing promotion – or is it a real, organic movement for change?…[Does it] seek to increase U.S. giving from 2% of GDP (where it’s been stuck for two generations) to some higher point?” Amen to that!

  5. Rating nonprofit effectiveness is such a tricky challenge. Philanthropedia, one rating system that is driven by crowdsourced feedback from experts, comes under fire from the clean water space for being just “a popularity contest.” But others claim it’s an improvement over previous evaluations.

  6. Writing in the Chronicle of Philanthropy Nicole Wallace shows the value of sharing data by profiling Crisis Text Line, which gives other nonprofits, researchers and government agencies access to their data of 60,000 counseling sessions with teens in crisis to use in their own programs. It begs the question whether other social change data could be shared and how we make that easier to do.

  7. Sue Dorsey from Water for People was among a group of nonprofit leaders at the InsideNGO conference who took the Overhead Pledge in August, vowing to fully disclose the true costs of their nonprofits. And she encourages other nonprofit leaders to follow suit. This is exciting because it is not enough for funders to get over the overhead myth, nonprofit leaders must as well.

  8. I am always a sucker for connecting literature and/or history to social change, and even better both, so David Bonbright’s post about how Mark Twain would have viewed recent trends in business is fascinating. Bonbright argues that Twain wanted American business to fully integrate profit and community. And we are beginning to witness this trend again where companies are “embracing the full implications of what they are – what they mean for the environment, for communities, for the most marginalized people affected by their supply chains…[because] this is best way to remain competitive and successful over time.” Let’s hope!

  9. The new “sharing” economy is not all good, but not all bad either, as Daniel Ben-Horin argues that “there are enormous opportunities for the social sector to engage with the values-driven segment of the sharing economy.”

  10. Finally, some guidance on making your nonprofit email marketing more mobile friendly and your website better able to connect people to your cause. It’s all about responsive, engaging design.

Photo Credit: Seth Anderson

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Weaving Nonprofit Capacity Building Into Philanthropy: An Interview with Kathy Reich

Kathy ReichIn today’s Social Velocity interview, I’m talking with Kathy Reich, Director of Organizational Effectiveness Grantmaking at the David and Lucile Packard Foundation. Kathy leads a cross-cutting program to help 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. She has been with the Foundation since 2001, and previously held positions in the Organizational Effectiveness and Children, Families, and Communities programs. Prior to joining the Foundation, she worked in a non-profit, on Capitol Hill, and in state and local government in California.

You can read other interviews in the Social Velocity Interview Series here.

Nell: There is often a chicken or the egg scenario in the nonprofit sector where nonprofit leaders are hesitant to tell funders their real struggles and needs for fear of appearing unworthy of investment, and philanthropists are hesitant to stick their noses in the business of the nonprofits they fund, so organizational capacity needs are not openly discussed or addressed. How does the Packard Foundation uncover the organizational needs of your grantees and what would you advise other funders to do in order to have more open and transformative discussions with their grantees?

Kathy: Well, I try not to tell other people—funders or nonprofit leaders—what to do! But I can tell you what works for us at the Packard Foundation. First, we encourage each of our program officers to learn about the organizational strengths and challenges of their grantees, and to weave capacity building into grantmaking strategies. That’s a big part of the work of the Organizational Effectiveness team here at the Packard Foundation.

But we also have a separate Organizational Effectiveness (OE) program, staffed by its own program officers and with its own budget, to help grantee partners strengthen their fundamentals so they can focus on achieving their missions. Once a non-profit gets a grant from any Packard Foundation program, they’re also eligible to apply for an OE grant. We support a wide range of projects to promote individual and team leadership, organizational planning and development, and the development of healthy networks.

The application process is pretty simple and straightforward. It starts with a letter of inquiry where our grantee partners have to answer just a handful of questions: What are the objectives of your project and what do you expect to accomplish? How will this project support your organization in meeting its goals, and over the long term, enhancing its effectiveness? What special challenges or changes have caused your organization or network to focus on management and organizational issues at this time? How do you propose to use Foundation funds? Who from your organization’s staff and board has made the commitment to lead the project?

Here’s the most important part of our approach: We work very hard to be responsive to the needs of our partners. We never say, “We think you need a strategic plan, and that’s the only thing we’re going to fund.” We listen to the grantee’s assessment of their strengths and challenges, and serve in a coaching role to help them develop the OE project that best meets their needs.

Folks can read more about the Organizational Effectiveness program on our website, or on our wiki page, where we share resources, evaluations of the program, and other information.

Nell: Leadership development is something that is fairly prevalent in the for-profit sector – it’s understood that good leaders need coaching and support along the way – but leadership development is rarely supported in the nonprofit sector. Why do you think there is that disparity and what do we do to change it?

Kathy: I think you’re right — the lack of investment in leadership development and talent management in the nonprofit sector is a significant issue. We don’t have any shortage of talented, passionate people entering this sector. But I believe that we lose too many of them before they rise to senior-level leadership positions.

Some of that brain drain happens for financial reasons: people are staggering under the weight of educational debt, or they’re lured away by more lucrative career prospects in the private sector. But much of the loss of talent is preventable. People leave because they feel burnt out and undervalued. They can’t forge career pathways and can’t access meaningful professional development. They sometimes have lousy managers. Their jobs don’t offer opportunities for promotion, or sufficient work/life/family balance.

That is all stuff that the nonprofit sector can fix. As a sector, we can even tackle some of the thornier issues around compensation and educational debt. And funders can lead the way. But philanthropy is not doing that. Rusty Stahl at the Talent Philanthropy Project, a Packard Foundation grantee partner, points out that between 1992 and 2011 foundations spent, on average, about 1% of grant dollars on nonprofit talent development. I’m not sure why there’s been a lack of investment in leadership development in the nonprofit sector over time — especially when virtually everyone seems to agree that effective leadership is one of the keys to lasting social change.

I do see some glimmers of hope. In the OE program last year, 21 of the 86 grants we awarded focused on leadership development, including projects that invested in interventions like executive coaching, board development, succession planning, and executive transition at key grantee organizations. And a number of efforts are underway throughout the Foundation to support existing and/or emerging leaders in the issue areas where we work. Clearly, though, much more is needed.

Nell: There has been a concerted effort in the past year to overcome the “Overhead Myth,” the idea that nonprofits should spend as little as possible on “overhead” (administrative and fundraising) expenses. But there is still much work to do before that idea becomes mainstream in the philanthropic sector. How do we change funder (and nonprofit leader) thinking about overhead?

Kathy: I’m a fan of so many leaders and organizations who have spoken out on this issue, including Packard Foundation grantee partners like Guidestar, California Association of Nonprofits, and Grantmakers for Effective Organizations. They’ve done a great job of making a research-based case that arbitrary, low overhead rates don’t capture the true cost of delivering non-profit programs and services. I think that there are a couple of common-sense things that funders and nonprofit leaders can do to keep this debate at the forefront of people’s minds.

First, prepare real budgets. If the funder tells you, “You can only have $25,000 for this project,” that’s fine. That’s their budget. But submit a budget for the full cost of the project, including your personnel, facilities, and other costs of doing business. Let them see what their funding covers, and what it does not. Be honest if you do not know where the rest of the money will come from. At least it will spark a good conversation with your funder about the gap, and about your real costs. Most funders do not penalize honesty. If the funder does penalize honesty, their money probably is not worth your trouble.

Second, define what goes into your overhead rate, and stick with it. Many funders have a “rule” about acceptable overhead; 15 percent, 10 percent, even 5 percent. But most do not have a standard definition for what’s included in that rate. You should have one. Define it, calculate it, and then defend it.

Nell: Philanthropy is a very personal and values-driven thing, but at the same time we need to funnel more philanthropic money towards the most effective solutions. Do you think it’s possible to get more philanthropists to give based on results rather than interests and values, or can we somehow better combine the two drives?

Kathy: I think combining values and a focus on results is not just desirable — it’s essential. None of us goes into social change work with a completely cool, dispassionate lens. We go in with passion. We want to make a difference. We bring our whole selves to this work. That’s what makes it wonderful, and that’s why we stay in it.

At the same time, resources are limited — money, people, time — and we have to be sure they’re being well-spent. Ideally, we want to make sure those resources are being better-spent than they could be on other endeavors.

At the Packard Foundation, we try to craft a balance. Our mission—to improve the lives of children, families, and communities, and to restore and protect our planet—derives directly from the values and beliefs of our founders. The way we go about that work is deeply rooted in five core values, which also come from our founding family — integrity, respect for all people, belief in individual leadership, commitment to effectiveness, and the capacity to think big. But we also are committed to scientific rigor, evaluation, and most importantly, learning. We care not only about what grant funds accomplish, but also about how we do that grantmaking, engage with grantees and improve over time. You can read about some of what we’ve accomplished over the years on our new digital timeline.

Photo Credit: Packard Foundation

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New Book: Reinventing the Nonprofit Leader

Nonprofit leaderMy focus this month at Social Velocity is nonprofit leadership. As I mentioned earlier, May’s webinar is Reinventing the Nonprofit Leader. And I’m delighted to release today, as promised, the companion book, Reinventing the Nonprofit Leader.

Here is an excerpt from the new book:

The new millennium has been a difficult one. A crippled global economy, threatening climate change, crumbling education and healthcare systems, and a widening income gap comprise a few of the social problems we face.

And as our social challenges mount, the burden increasingly falls to the nonprofit sector to deal with the fall out.

So it is time for a new kind of nonprofit leader, one who has the confidence, ability, foresight, energy, and strength of will to lead the nonprofit sector, and our communities, forward. Indeed it is up to the leaders of our great nonprofit sector, to face, rather than shrink from, these many challenges.

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 social change.

So in the hopes of inspiring nonprofit leaders to claim their rightful place as true heralds of social change, I have written this book. It is based on my many years of coaching nonprofit leaders to success. This book lays out the elements that those nonprofit leaders have learned in order to embrace their role as reinvented nonprofit leaders.

The reinvented nonprofit leader:

  • Unlocks the Charity Shackles and demands to be treated as an equal and critical part of the economy, the community, the solution.
  • Refuses to Play Nice and gets real with funders, board members, partners, and staff who are standing in the way of progress.
  • Embraces Strategy that moves beyond just “doing good work” and gets real results.
  • Uses Money as a Tool because big plans will not come to fruition without a sustainable financial engine behind them.
  • Demands Real Help and the tools necessary to achieve the mission because the best leaders recognize weakness and solicit help to address it.
  • Breaks Down the Walls of the organization and lets the world in as fully engaged partners, advocates, and supporters.
  • Remembers the Dream that got them here in the first place because often it is the big idea that propels great leaders forward.

It is a tall order, but true leadership is.

We no longer have the luxury of mediocre leaders. These times demand confident, capable, engaging leaders who are a beacon to a society whose mounting problems are overwhelming at best.

While it may seem like an impossible transition to become a new kind of nonprofit leader – one who is more entrepreneurial, innovative, confident and strategic – let us remember that nonprofit leaders have always been entrepreneurs. They have recognized some sort of disequilibrium in our society and have created, out of nothing, an organization, a solution and an assembly of staff and volunteers to fix it. In essence, I am simply encouraging you, the nonprofit leader, to claim your rightful place.

The reinvented nonprofit leader is confident, engaged, and savvy. She will, I have no doubt, lead this great nonprofit sector, and all of us who benefit from it, to new heights.

So how do you become a reinvented nonprofit leader? Let’s take these one by one…

 

If you want to read more, download the Reinventing the Nonprofit Leader book now.

And if you register for the webinar before May 21st the companion book is free. You can register for the Reinventing the Nonprofit Leader webinar here.

 

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7 Rules for Brilliant Nonprofit Leaders

CompassI came across a great article the other day, Rules for Brilliant Women, and as a female entrepreneur I found it really inspiring and affirming. But I realized nonprofit leaders need a similar list. Because just as women often sell themselves short, so too do nonprofit leaders. In fact, there are some interesting parallels between the place of women and the place of nonprofits in society, but that’s a post for another day.

So in the hopes of inspiring nonprofit leaders to claim their rightful place as true heralds of social change, here are 7 rules for brilliant nonprofit leaders:

  1. Find and Keep Your True North
    As a nonprofit leader you probably receive advice all day, every day. From board members, to donors, to staff members, to colleagues, to bloggers and consultants (ha!), everyone has an opinion about how you should do your job. So close your eyes, take a deep breath, and find your true north. Don’t do what you think you “should” do, or what someone else tells you to do. Follow what you know deep down is the right path.

  2. Remember the Dream
    The daily grind can wear a nonprofit leader to the bone. It is often an exhausting, thankless job. But you have to remember what got you here in the first place. And I bet that was some huge vision for how the world could be a very different place. Don’t lose sight of your overarching goal. And don’t lose heart that you may never get there. It’s the big honking dream that propels great leaders forward.

  3. Admit When You Don’t Know
    Leaders don’t have to know it all. And in fact the best leaders are those who recognize their weaknesses and figure out how to address them. The first step is openly admitting when you don’t know (to your board, your donors, your staff). Only then will you find the freedom and power to scale that wall.

  4. Ask for What You Really Need
    And once you freely admit what you lack, you must ask for it. Whether you need more staff, better technology, greater knowledge – demand it. Create a detailed list of what will make you more effective as a leader, put a price to those items, and then make the pitch to your board, to funders, to anyone who can help you get what you need.

  5. Don’t Wait for Permission
    How many times do nonprofit leaders wait for their board chair, or a big donor, or a government official to allow them to do something? True leaders find permission internally and then show those around them why their path was the right one. I get that there are times when forging ahead without consent would be politically unwise, but those times are less often than many nonprofit leaders think. Don’t shut yourself and your staff down because you fear making someone else mad.

  6. Stop Being So Nice
    The thing I love most about nonprofit leaders is that, for the most part, they are truly good, decent people. They are trying to make the world a better place, so by definition they are considerate of others. But sometimes you can take being nice too far. Being nice to the donor who leads your nonprofit the wrong way, or the staff member who can’t cut it may work for that individual relationship, but is detrimental to the larger organization and ultimately your mission.

  7. Hit Pause on Saving the World Once in Awhile
    I don’t care how fast-paced and “always on” our world becomes, we always need time and space to breathe, reflect, regenerate. Because you are in the business of improving lives, as a nonprofit leader you are particularly prone to the martyr syndrome of equating taking a break with fewer lives saved. But you will actually be more productive if you regularly focus on things outside the realm of saving the world.

Oh nonprofit leaders, I love you so. You are brilliant, beautiful human beings doing truly amazing things. Own it.

Photo Credit: Shyamal

 

 

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Funding Stronger Nonprofits: An Interview with Denise Zeman

Denise ZemanIn today’s Social Velocity interview, I’m talking with Denise San Antonio Zeman. Denise has been President and CEO of Saint Luke’s Foundation of Cleveland, Ohio since 2000. A lifelong Clevelander, Denise’s career has spanned higher education, human services, healthcare and philanthropy.  Now in its 17th year of grantmaking, Saint Luke’s provides leadership and support to improve and transform health and well-being of individuals, families and communities of Greater Cleveland.

You can read past interviews in the Social Innovation Interview Series here.

Nell: Saint Luke’s Foundation is different than most foundations in that you have made a conscious commitment to funding the capacity of nonprofit grantees in areas such as leadership development and outcomes measurement. Why did the foundation decide to put an emphasis on capacity funding and what have you learned from those investments?  

Denise: Just over two years ago, our Foundation board and staff held a retreat. An important topic was our frustration over the reality that the recent economic downturn had produced tremendous need in our community and volatility in our grant budget.  Specifically, this downturn highlighted for us that we were spending more when the economy was good and less when the community needed us most. These concerns were analyzed, and the culprit was determined to be our spending policy, for although we knew we could not control the world economy, we realized that we could control the way we responded to it.

We had employed a traditional 5% payout since our inception in 1997, and decided to investigate spending policies that might provide us a higher, more predictable level of spending going forward. With much trepidation, the board approved a bold new spending policy that provides for a “floor” with certain tolerance limits. We increased our spending by about $4 million and established a spending range between 5 and 7%. For the past two years our spending has been very close to 7%.

With this came a strong commitment to working with our grantees and philanthropic colleagues to move toward funding what works in order to advance a smaller set of priorities. The new priorities more narrowly define our previously broad definition of “health” to focus on three specific strategy areas: Healthy People, Strong Communities and Resilient Families.

The role of our senior program officers also shifted from a focus on managing a set of grants to a commitment to advancing a strategy. We agreed upon long and short-term outcomes that guide our grantmaking decisions, and the program team now manages their portfolios of grants in a more entrepreneurial way. In addition to making grants, their due diligence includes an in-depth analysis of the grantees’ capacity to be successful.

A thorough analysis of the literature, conversations with colleagues and focus groups with grantees revealed six strengths that the highest performing nonprofits have in common. These include strong financial management, investment in leadership, a commitment to outcomes and learning, a spirit of collaboration, excellent communications, and advocacy for good public policy.

We support and encourage our grantees to develop these capacities in a variety of ways. In our formal and informal interactions, we encourage them to think about their approach to building these capacities and we provide support to assist them in this process. We ask probing questions such as “What keeps you up at night?” in order to nurture lines of communication, demonstrate our concern for their growth and development, and most importantly, learn. And we work with our regional association, Philanthropy Ohio, to bring national content experts to our region for programs and seminars on relevant topics. We also host meetings ourselves during which we invite thought leaders such as Geoffrey Canada (Harlem Children’s Zone), Dan Heath (Made to Stick and Switch), Fay Twersky (Beneficiary Voice), and Phil Buchanan (Center for Effective Philanthropy) to challenge the status quo and help us focus our efforts to build a stronger nonprofit and philanthropic sector.

In order to be able to deliver on their promise to the community, nonprofits must have a solid financial base. Our scrutiny of financial statements has increased, and with that has come a commitment to working with our grantees to improve their financial planning, monitoring, operations and governance. The Nonprofit Finance Fund and Financial Management Associates, LLC have provided local strategic financial management seminars to increase knowledge and inspire motivation to build financial capacities.

We also know that strong leaders produce great results. We therefore encourage and support comprehensive leadership development for our grantees, and we support efforts to implement leadership development practices that ensure good governance and empower professional staff to be leaders of change.

We are committed to tapping into the power of outcomes measurement as a way to support continuous learning and encourage performance improvement, and we work with our grantees to support their efforts to collect and use data to improve their outcomes for their clients. We have learned first-hand how challenging measuring impact in the social sector can be.  But we have also learned that unless we measure and move toward specific, measurable outcomes, we run the risk of spinning our wheels at best, and actually doing harm at worst. The works of Mario Morino (Leap of Reason) and David Hunter (Working Hard and Working Well) provide nonprofit and philanthropic leaders with the rationale and roadmap for making a measurable, meaningful and lasting difference for the people they serve, and we strongly encourage our grantees and colleagues to join us in embracing their approaches.

We have also learned the importance of supporting the capacity of our grantees to work with others.  We live in a nonprofit community that was built for a population of over one million people, and yet the last census revealed that our community has contracted by more than half. Our government and philanthropic resources have diminished, yet the need in our community has grown. We therefore work in partnership with our grantees and philanthropic partners to support collaboration in practice and in learning, and we have embraced the concepts of Collective Impact (Foundation Strategy Group) to inform our work.

Communication is also an area of focus for us. Borrowing from what we learned from Chip and Dan Heath in Made to Stick, we support strategic communications that help our grantees leverage outcomes and tell effective stories to advance their missions. This is not storytelling for the sake of storytelling; rather, it is using the power of outcomes to demonstrate effectiveness and impact.

While philanthropic support for health and human services is important, it is miniscule compared to government spending. We therefore support efforts to educate policymakers on relevant issues and influence institutions, systems and community and/or individual behaviors within the funding guidelines for private foundations.

Quite simply, we believe that strong nonprofits produce the strongest results, and as funders of impact, we believe it is our role to support our grantees to be the strongest they can be.

Nell: Leadership development is a particular area of interest for the foundation. What do you think nonprofit leaders need most to become more effective and what role can philanthropists play in that?  

Denise: We view strong, resilient leadership as one of the most effective tools for achieving superior results. In our work with grantees, we have learned that organizations that take an intentional, focused approach to leadership development achieve better outcomes for the people they serve. Nonprofit leaders need boards that are uncompromising on quality and results, and these boards must both challenge and support executive leadership to drive innovation and strategic performance.

As noted in Independent Sector’s Leadership Initiative, nonprofit leaders need “time, attention and resources to engage in high-quality leadership development programming that equips them to deliver significant results.” Leaders cannot be so “in the weeds” that they lose sight of their role as keepers of the promise. We encourage our grantees to use some of our general operating support to focus on leadership development, and to extend that focus to developing the “next generation” of leaders as well.

We also provide funds for nonprofit leaders to participate in high quality leadership development programs locally and nationally. Additionally, we support an individual professional development program for each member of our foundation staff to ensure that they continue to develop their own potential as leaders.

Nell: One of the arguments some philanthropists make against providing funding for building nonprofit organizations is that it is harder to demonstrate the return from a capacity building investment than a program investment. How do you respond to that argument?  

Denise: I agree…it is hard, but we have never been an organization that avoids hard! In our work with the TCC Group last year, we learned more about what it takes to be a learning organization. We made a commitment to learning from everything we do, and we are committed to learning more about how to measure the impact of capacity building investments.

And while we are still learning, we have some specific examples that demonstrate the return on our investments in building capacity. We know, for example, that our support for outcomes and learning has helped some of our grantees build the capacity to reflect their success by implementing outcomes management software and producing results-oriented dashboards. Eight of the organizations we helped form strategic alliances have merged into four, and are serving more people with fewer resources. We also know that some of the communications-related grants we have made have enabled grantees to extend their reach in innovative ways such as electronic case management programs. And we know that policy-focused grants have allowed some of our safety net providers to come together to provide patient-centered medical homes for some of our most vulnerable citizens in advance of Medicaid expansion. While these results might be viewed as anecdotal, we believe they are building our own capacity to make a strong case for capacity building.

Nell: Funders are becoming increasingly interested in nonprofit outcomes measurement, yet few funders are willing to fund evaluations. How do we solve that chicken or the egg scenario?

Denise: I was recently invited to participate on a panel called “Do Funders Get It?” at a national conference called After the Leap. The panel responded to Nancy Roob’s stirring plenary session in which she described the phenomenal work of the Edna McConnell Clark Foundation in supporting youth development organizations across the country to be more effective.

We posed the question “Do funders understand the resources and support nonprofits require to scale impact?” to the audience, and not surprisingly, the response affirmed the reality that most of us do not. The truth that funders want results but are reluctant to fund evaluations has been confirmed by the Center for Effective Philanthropy, Grantmakers for Effective Organizations, and the National Committee for Responsive Philanthropy, to name just a few.

So how do we solve this dichotomy? As with any attempt at true and lasting change, there is no single silver bullet that will suddenly convince funders to change their traditional ways of grantmaking. But I do believe there is a growing receptivity to the concept of  funding for impact, and there is a role for philanthropic affinity groups and regional associations to educate their membership with concrete suggestions that funders can use with their boards, professional staffs and grantees.

Government funders are beginning to understand the importance of funding what works, and this will raise the stakes for nonprofits that rely heavily on public support. They will have to demonstrate impact or they will not receive support. This will raise the evaluation imperative to standard operating procedure, and funders that care at all about their grantees will be compelled to support building evidence that their approaches do, in fact, achieve sustainable results.

Nell: Although Saint Luke’s Foundation is a real trail blazer in the philanthropic world, philanthropy overall is rather slow to change, particularly when it comes to funding in new ways. What do you think it will take to get more funders to understand that stronger nonprofit leaders and organizations can equal more impact?

Denise: Thank you for your kind words. Our change in spending policy and approach was largely informed by Mario Morino’s admonition to “rethink, redesign and reinvent the why, what and how of our work in every arena.” He went on to suggest that we “need to be much clearer about our aspirations, more intentional in defining our approaches, more rigorous in gauging our progress, more willing to admit mistakes, more capable of quickly adapting and improving – all with an unrelenting focus and passion for improving lives.” When put that way, who could argue?

Foundations and nonprofits are about the business of improving lives. The Foundation’s role is not to DO the work…our job is to support those who DO. And unless we are willing to provide sufficient support to enable our grantees to build systems to assess the impact of their practice, we will fail. We must be bold in challenging and supporting one another to disrupt the sector in unprecedented ways. We at Saint Luke’s Foundation have changed our approaches from spending to strategy to portfolio management, but we have stayed true to our original mission statement to improve and transform health and well-being in our community. I suppose it is fair to say that our very mission implies that we will fund what improves and transforms…and therefore we see it as being true to our mission to build highly effective provider organizations.

Photo Credit: Saint Luke’s Foundation

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