Since I was out of the office for part of July and checked out of social media (which I highly recommend!), the below list is in no way comprehensive. But it is what caught my eye in the world of social innovation in July (when I was paying attention). More than ever, please add what I missed in the comments below.
You can see the 10 Great Reads lists from past months here.
- In a highly provocative op-ed, Peter Buffett, son of Warren Buffett, wrote a pretty scathing rant against today’s philanthropy, calling it “conscience laundering — feeling better about accumulating more than any one person could possibly need to live on by sprinkling a little around as an act of charity.” Needless to say, much argument followed, including Howard Husock’s post arguing that Buffett is “far too pessimistic about what philanthropy, well-conceived, can accomplish.”
- Dan Cardinali, CEO of Communities in Schools and an emerging voice on the importance of measuring nonprofit outcomes, wrote a third piece in his series on redefining the nonprofit sector. This one explores the need for nonprofits to “hold ourselves accountable to objective measures and quantifiable outcomes.”
- And another nonprofit leader trying to shake things up, Bill Shore of Share Our Strength, offers the provocative “We Just Don’t Have the Money, and Other Fibs We Tell Ourselves“.
- Antony Bugg-Levine from the Nonprofit Finance Fund provides additional fodder to the conversation with his post “Navigating Tough Trade-offs in the Era of Scarcity.”
- Lucy Bernholz, philanthropy truth teller and future seer, offers three ways we can reinvent philanthropy in this great, short video brain dump.
- Kathleen Enright, CEO of Grantmakers for Effective Organizations, talks with Paul Carttar, former Director of the Social Innovation Fund, about what he learned there. It remains to be seen what impact the Social Innovation Fund will have, but as Paul says, government can and must play a role in social innovation, “The challenge for everybody — for government and for philanthropy — is to understand what each has to offer.”
- The New York Times uses Think Impact (which encourages entrepreneurship in third world communities) to provide an interesting case study of the dilemma of deciding whether to be a for-profit or nonprofit social change organization.
- Ever provocative, Phil Buchanan from the Center for Effective Philanthropy argues that the approach MBA programs take in teaching philanthropy “denies the reality that nonprofits and philanthropy work to address the problems that have defied markets…and, in many cases, are a result of market failure.”
- Writing on the Pioneers Post blog, Jeremy Nicholls takes issue with the word “impact” and encourages us to think about “value” instead.
- The National Committee on Responsive Philanthropy found that in 2011 American foundations increased unrestricted giving by 50% (from 16% of all grant dollars going to support general operating in 2010 to 24% in 2011). Now that’s an exciting trend!
Photo Credit: josue64
Note: I was asked by Markets for Good to write a post as part of their ongoing online conversation about improving how money flows to social change. Markets for Good is an effort by the Bill & Melinda Gates Foundation, the William & Flora Hewlett Foundation, and the financial firm Liquidnet to improve the system for generating, sharing, and acting upon data and information in the social sector.
Over the past several years, Markets for Good has been a forum for discussion and collaboration among online giving platforms, nonprofit information providers, nonprofit evaluators, philanthropic advisors, and other entities working to improve the global philanthropic system and social sector. Below is the post I wrote. You can see this post and the others in their series and contribute to the ongoing conversation at the Markets for Good blog.
As we talk about creating a space “where capital flows efficiently to the organizations that are having the greatest impact” we must address the elephant in the room: how nonprofits are funded.
Currently that’s a pretty broken model. And if we are ever to direct more money to more social change, we must fix it.
In an ideal world, a social change organization would create a potential solution to a social problem, prove that the solution actual resulted in change, and then attract sustainable funding to grow that solution.
But that’s not currently happening because the way nonprofits are funded is broken in three key ways:
Nonprofits don’t articulate a theory of change. 10 years ago it was enough for “charities” to “do good work.” In an ever-increasing drumbeat nonprofits are being asked to demonstrate outcomes and impact. And for good reason. If we are truly interested in social change then we must understand which organizations are actually creating it and thus deserve our investment.
But you cannot demonstrate outcomes and impact if you have not first articulated what outcomes and impact you think your solution provides. Those nonprofits that truly want to solve a social problem (as opposed to simply provide social services) must articulate a theory of change. A theory of change is an argument for how a nonprofit turns community resources (money, volunteers, clients, staff) into positive change to a social problem. It seems simple, yet most nonprofits working toward social change have not done this.
We need to change that. This simple argument is the first step in creating real, lasting social change and attracting money to be able to do it in a financially sustainable way.
Nonprofits struggle to prove impact. Once a theory of change is in place, nonprofits need to prove whether that theory is actually becoming a reality. Nonprofits have struggled for years to figure out how to measure whether they are actually achieving results. But they cannot figure it out on their own.
Philanthropy needs to step up to help fund the work, or on a much larger scale, social science could prove the impact of overall interventions that nonprofits can then implement.
Either way, the burden of proof can no longer rest solely on the shoulders of individual nonprofits.
Fundraising isn’t sustainable. Once social change is actually happening, we want to grow that effective solution in a sustainable way. But that necessitates a real financial model.
Most nonprofits chase low-return fundraising efforts that lock them into a band-aid approach that is far from financial sustainability. Few nonprofits create and execute on an overall strategic financial model that aligns with the impact they want to achieve and their organizational assets.
We have to stop the madness.
We must help nonprofits create an overall financial engine that strategically and effectively supports the social change they are working toward.
Philanthropists must provide nonprofits the runway necessary to find the right financial model for their organizations. Capacity capital funding could do this, allowing nonprofits the space to analyze their current money-raising activities and create and execute on a plan for transforming those into a sustainable financial model. The end result would be nonprofits with a great solution to offer suddenly have the ability to grow the solution in a sustainable way.
If we are really serious about directing more money to more social change, we need to reinvent how money flows to nonprofits. Instead of relying on a broken fundraising model, we need to take a big step back and get strategic. With articulated theories of change, systems for effectively proving impact and the runway to create real financial models, nonprofits will be able to bring social change to sustainable fruition.
Photo Credit: Markets for Good
I’m excited to report that a week from today, July 26th, I will be participating in a live online chat at the Foundation Center’s Grant Space website, titled “Are You a Social Entrepreneur?“.
Abby Chroman, leader of global community curation for AshokaHub, and I will be fielding questions from the audience about social entrepreneurship, social change, nonprofit innovation, capacity capital, social return on investment and much more.
Some of the questions we’ll be discussing include:
- What qualities do social entrepreneurs possess?
- How is this concept different from traditional corporate structure, even one with a socially-minded mission?
- How do you truly accomplish social change vs. simply doing “good” work?
- How can nonprofits especially incorporate some of this thinking to be successful in fulfilling their missions?
- How do you measure social impact and return?
But the majority of questions are up to the audience. This live chat will happen entirely in the chat window on the Grant Space website. When the chat goes live, you can submit your questions and comments and interact with Abby and me and other readers, but you can also send questions ahead of time.
So join us! Registration is free at the Grant Space web site here. I look forward to your questions!
Photo Credit: Colin_K
I’m a little late getting the June 10 Great Reads list out this month because I was on vacation. But June didn’t disappoint, with some great articles that make us think about things in new ways, from how philanthropists fund, to how “nonprofit” is defined, to how homelessness and food insecurity can be solved, to how Millennials give and much more.
Below are my ten picks of the best reads in social innovation in June, but please add what I missed in the comments. If you want to see more than just this list of 10, follow me on Twitter, Facebook, LinkedIn or Pinterest. And if you want to read 10 Great Reads lists from past months, go here.
- A new debate raged on the “old” topic of defining the nonprofit sector. Phil Buchanan at the Center for Effective Philanthropy started it off with this 6-part series on articulating the value of the nonprofit sector. And along the same lines, Mark Hecker at the UnSectored blog wrote this really thought-provoking piece about the language of social good.
- From The Atlantic comes a great article about the enormous opportunity of impact investment, “How Financial Innovation Can Save the World.”
- The on-going drumbeat to get nonprofits to advocate for their own sector in Congress gets louder with “Nonprofits Missing From Big Battles (in Congress)” and a united movement among San Francisco nonprofits to push for more city funding.
- David Henderson is easily one of the greatest thinkers in the social sector space and he takes issue with a new app designed to “solve” homelessness. His post really begs the question, “To What End?”
- Always at the ready with fantastic financial tools for the nonprofit sector, the Nonprofit Finance Fund releases a list of Top 10 Finance Essentials for nonprofits and, not to forget that the philanthropy that funds nonprofits also needs to change, they also have a list for nonprofit funders.
- In The Washington Post, Sarah Kliff explores new experiments and studies about how to solve urban food deserts.
- As a mother of two young boys I agree there is definitely something to emulating how kids play, as Philip Auerswald argues at the Harvard Business Review blog: To Innovate, Play with Pieces Off the Game Board
- The third annual Millennial Impact Report, about how the millennial generation connects with nonprofits, was released and lots of people had things to say about the data, including 3 New Truths About Millennials and How Millennials Connect, Involve and Give.
- At the Center for High Impact Philanthropy blog Jen Landres describes how philanthropists can have much greater impact by being “unsexy” in their giving.
- Decrying the over-emphasis on capital campaigns in the arts world, Rebecca Thomas and Rodney Christopher argue that “scores of organizations jeopardize the long-term vibrancy of their programs because they focus on getting the building built rather than having a healthy organization inside it.” Amen to that!
Photo Credit: Frank Starmer
In this month’s Social Velocity blog interview, we’re talking with Aria Finger, COO of DoSomething.org. Aria oversees the programmatic and business development activities that empower millions of young people to take action each year around causes they’re passionate about. She reads economic theory for fun, loves vanilla cupcakes and thinks that “After Innocence” should be required movie viewing for anyone who cares about social justice. Aria currently serves on the board of Care for the Homeless, is an adjunct professor at New York University and was recently named to Crain’s New York Business list of “40 under 40″.
You can read past interviews in our Social Innovation Interview Series here.
Nell: DoSomething was founded almost 20 years ago, long before the explosion of social entrepreneurship and social media. How has the organization evolved and kept up with the new energy and excitement around social change and new technologies for connecting people?
Aria: DoSomething.org has always had the same goal – enable young people to take action around the causes that they’re passion about. The exciting part is that now, in 2012, we have an entirely new toolkit at our fingertips – mobile, social, the web, etc – to reach millions of young people who want to make a difference. Experimentation and iteration keeps us on our toes. About a year ago, we decided to text 500 of our users who we hadn’t heard from via email in 6+ months. We sent them a text message and in 9 minutes, we had a 20% response rate. Just incredible. We found that with texting we could activate 20% of a group of “defunct” users. This SMS test was the basis for our pivot to mobile – using cell phones as a means to activate and engage teens. We now text out to over 220,000 teens on a weekly basis.
Nell: How does an organization like DoSomething, that is all about the youngest generation, remain relevant as the organization and its staff age?
Aria: One word: interns. At any given time, we have 20-30 college students working for the organization. And we pay them. These interns are coming to pitch meetings, becoming instant focus groups, creating full-fledged national campaigns and being the frontline of interaction with our users.
In addition, in this new world where everything can be crowd-sourced, we use that to our full advantage. When we were re-launching our website, we put the mocks on Facebook and asked our fans what they thought. When we’re stuck on a campaign name, we go out to our 500,000+ twitter followers and ask them what we should call it.
Nell: At DoSomething you are committed to metrics and have some impressive quarterly performance dashboards. How do you balance what is easy to measure, like outputs (# of members, # of campaigns), with what’s harder to measure like outcomes (what social change DoSomething is creating)?
Aria: At DoSomething.org, we LOVE data. In fact, we have two data analysts on a staff of 40. They inform everything we do and we love that we get to show off their awesomeness in our quarterly dashboards. That being said, you can’t always measure in numbers the value of a warm and fuzzy story about a teen’s first volunteerism experience being with our Teens for Jeans campaign. Qualitative anecdotes do have a place in performance dashboards as well. What I’m really excited about is 5 years down the road when we’ll be able to track our young people long-term – see them go from engagement in one campaign to five campaigns to perhaps starting their own Do Something Club when they go off to college. It will be really exciting to measure whether DoSomething.org members are happier, healthier, participate in their communities more, register to vote more, etc.
Nell: In the last few years there has been a huge increase in online action platforms like Change.org that organize people around causes. How does DoSomething compete with or complement these new channels and movements?
Aria: We love the Change.org folks and all of the other fabulous online platforms that are promoting social change (half of our staff found their job on Idealist.org!). For the most part, the thing that sets DoSomething.org apart is our focus on teenagers. A lot of the other sites do a great job activating older folks – mid 20somethings and beyond – and our focus has remained on high school and college students.
Nell: The Occupy Wall Street movement is largely driven by dissatisfaction among the Millennial generation. What are your thoughts on Occupy Wall Street, how they’ve organized and their potential to make change happen?
Aria: Personally, I’m a supporter of any movement that tries to change this world for the better, as long as they’re doing so in a peaceful and constructive way. A lot of millennials are pissed off because they perceive that the “older folks” have done a good job screwing up our world and now they’re left to pick up the pieces. We see a lot of young people really tuning out politics because they don’t see any good coming out of it and they think they can do a better job trying to fix things themselves. There has been plenty of criticism of the Occupy Wall Street movement, and I’m sure many of them are valid, although I do think they created a national conversation around income distribution, fairness, jobs for middle class people, etc that wasn’t happening before them.
There is a growing discussion among social impact organizations and those who fund them about how to measure impact. It is indeed a very slippery endeavor.
Mario Marino, Chairman of Venture Philanthropy Partners (a venture philanthropy fund in Washington D.C. that makes growth capital investments in nonprofits) has been encouraging nonprofits to measure outcomes for years. Indeed one of the fundamental characteristics of venture philanthropy is a reliance on metrics and outcomes for investment to happen. He recently wrote a post arguing that he is “increasingly worried that the vast majority of funders and nonprofits are achieving, at best, marginal benefit from their efforts to implement outcomes thinking.” He argues that in an zealous pursuit of metrics we have left common sense and “softer” impact behind and encouraged nonprofits to move away from the impact they were working towards.
To add further confusion to the outcome measurement discussion, the Gates Foundation’s Melinda Tuan studied 8 approaches to measuring cost vs. social impact, or the value that nonprofit organizations create versus the cost of their activities. The results of the study were disheartening; none of the approaches they studied was a magic bullet, all had significant drawbacks, which led them to conclude: “Integrated cost approaches to measuring and/or estimating social value are still in the nascent stages of development due to the lack of maturity in the field of social program evaluation.”
And there are other camps working towards outcome measurement, like those debating about whether randomized control trials (a research methodology where a random group of program participants is tracked and compared to a random group of cohorts who did not participate in the program) are feasible for nonprofits. And on the social business side, the GIIN (Global Impact Investing Network) is developing standards for measuring and communicating the social impact of investments known as The Impact Reporting and Investment Standards (IRIS). And that’s just a start.
This whole social impact measurement endeavor is incredibly important because if we can figure out a way to measure which social change efforts work, and which don’t, we can allocate resources accordingly and, in theory, get closer to solutions to social problems.
But I think we need to first take a step back. As is so often the case in efforts to build nonprofit capacity, effectiveness and infrastructure (including, in this case, the ability of nonprofits to evaluate their work) the focus is on the largest, most resourced nonprofit organizations. Let’s remember that more than 80% of nonprofit organizations have budgets under $1 million (see the Nonprofit Almanac). Budgets that small leave very little room for funds to support randomized control trials or other kinds of outcome measurements.
But an even bigger roadblock is the fact that many nonprofit organizations have not articulated their theory of change, or their logic model. Many nonprofit organizations are doing good work, but they don’t necessarily have an articulated strategy around that good work. A logic model helps an organization understand and articulate how they believe that they translate resources (inputs) into social impact, or change in a community. This understanding allows the organization to better articulate (to potential funders, volunteers, supporters, partners), and create strategy around, their work. A potential logic model for an English as a Second Language after-school program could be as follows:
One of the first steps Social Velocity undertakes with clients who want to increase organization capacity, sustainability, revenue, growth, or really any kind of progress, is to create a logic model with the organization. The majority of nonprofits that I encounter don’t have an articulated logic model or theory of change. It may seem like an academic exercise, but I would argue that it is absolutely critical to just about anything a nonprofit does. In order to understand their place in the community, the value that their work adds, how additional inputs (like funding) can increase impact, and their strategy for delivering services, they need to articulate this process.
But the larger debate about outcome measurement ignores the fact that the majority of nonprofit organizations have not completed step 1 in outcome measurement: articulating a strategy for using resources to create outcomes. Once this is articulated, we can talk about how to measure whether that strategy is actually coming to fruition.
Lucy Bernholz, head of Blueprint Research and Design, a philanthropy consulting firm, and thought-leader on trends in philanthropy is preparing a monograph on what 2010 will hold for the social sector. As a true adopter of social media, she is asking others to contribute, in essence crowd-sourcing answers, this year to her annual “what will next year bring” treatise. Last week, she asked her blog readers, Twitter followers, and all others the question: “What trend, change, entity, or idea will matter most to the social sector in 2010?”
She’s gotten a great set of responses, in blog, email, Tweet, and other forms, which she and others are collecting. It’s kind of an interesting experiment to ask a broad question to the universe and see what you get back, and whether it is intelligible and adds anything to what she may have already been planning to write. It is also interesting to navigate the very fine line between future-telling and wishful thinking. I probably tend to fall into the latter category, but if we don’t envision the future we want to see, we probably won’t get there.
I submitted my thoughts to Lucy via Twitter, but it is difficult to distill broad ideas into 140 characters, so I will elaborate on my thoughts here.
There are three things that I think will matter most to the social sector in 2010:
- Increased Philanthropic Dollars Will Go to Organization Building. Donors will increasingly realize that they can achieve a greater social return on their investment (more social impact) when they invest in the capacity, or growth of a successful nonprofit. That is to say that donors will increasingly realize the power of BUILDING organizations rather than BUYING services. I don’t think donors will move away from buying services, there will still be a majority of that. But I think donors will start to understand the difference between a “donation” where they are simply supporting an organization’s current program, versus an “investment” that makes the organization stronger, healthier, better positioned to address the social problem head on.
- Nonprofits Will Move From Outputs to Outcomes. And in order to meet this trend of donors wanting to invest rather than donate, nonprofits will begin to understand that they will attract more capital if they can demonstrate a social return on investment, or a change in outcomes, not just outputs. Outputs have been a favorite of the nonprofit sector, i.e. 500 kids went through our after-school program, 1,000 meals were served in our kitchen. But outputs don’t demonstrate social impact, or a change to a problem. Outcomes do, which is what investors increasingly will want to see. Outcomes are about changed lives, changed trajectories. It is so much more powerful and compelling to be able to say that the 500 kids that went through our after-school program stayed in school and increased their academic achievement which was a marked difference from their cohorts that didn’t attend our program. Then, if you can continue to track those children and demonstrate that they continued to stay in school at a higher rate than their contemporaries, you have a compelling change to a trajectory. You begin to show how your organization is an intermediary between donors who want to invest in social change and a change you are making in the community. I believe that philanthropic capital will begin to flow more readily to those nonprofit organizations that can demonstrate outcomes as opposed to outputs, and those nonprofits that can comply will be more successful at attracting capital.
- The Social Capital Market Will Increasingly Include Philanthropic Capital. The social capital market to date has focused mostly on investing in social businesses that provide both a social and financial return. Philanthropy and nonprofit organizations have been somewhat left behind. But this will change with a growing recognition of the benefits of broadening the definition of social capital markets to include nonprofits and philanthropy. There is much to be gained when ALL organizations working towards social impact and ALL investors interested in social return can pool resources and work towards closer collaboration, creation of new financial vehicles, sharing of ideas and information.
Perhaps 2010 is too early for all three of these trends to really take hold, but I think the beginnings are there. It will be interesting to see what Lucy comes up with, and what actually starts evolving in a few short months when the new year begins.
But in the meantime, what are your thoughts? Where do you see the social sector going in the coming year?
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