Note: As I mentioned last week, I am at the Grantmakers for Effective Organizations conference this week curating a group of bloggers. First up is Phil Buchanan, President of the Center for Effective Philanthropy (CEP). His guest post is below. In full disclosure, some of the foundations he mentions below are clients or funders of CEP. Don’t forget you can also follow the conference from afar on Twitter #GEO2016 and #2016GEO
Culture was front and center on the first day of the 2016 GEO National Conference – the featured topic at the opening plenary. A conference for some 800 staff of grantmakers interested in maximizing their external impact started by looking inward, at what happens within the walls of staffed foundations.
As Kathleen Enright, GEO’s president & CEO, put it, “culture and effectiveness are inextricably linked” suggesting that companies have recognized this. She cited as an example her positive experience as a customer with the online shoe retailer Zappos, which has been held up as an exemplar in terms of its corporate culture and customer service. [Note: Zappos was acquired by Amazon in 2009 but has sought to maintain a distinct culture.]
Enright moderated the panel discussion, which included Jim Canales of the Barr Foundation, Carrie Pickett-Erway of the Kalamazoo Community Foundation, and Sylvia Yee of the Evelyn and Walter Haas Jr. Fund.
“Culture is all around us, it permeates everything we do, and yet we often don’t realize it,” said Canales.
It also emanates outward. Yee discussed program officers as the nexus where culture and values are “translated” from the inside to the outside. And her point is certainly supported by the data. The organization I lead, the Center for Effective Philanthropy (CEP), has surveyed staff at nearly 50 foundations over the past decade. We know from our analyses that what happens within a foundation’s walls doesn’t stay inside those walls – that staff perceptions and grantee perceptions of foundations are correlated on some key dimensions.
This data and the arguments of the panelists about the importance of culture also resonate with recent writing on the topic. Tom David and Enright’s essay, The Source Codes of Foundation Culture, argues that foundation culture is crucial but often under-appreciated. In a similar vein, Amy Celep, Sara Brenner, and Rachel Mosher-Williams of Community Wealth Partners suggest in a recent issue of Foundation Review that, “Foundations have a tremendous untapped opportunity to more intentionally build culture.”
But culture and results don’t always correlate perfectly, as Fay Twersky of the William and Flora Hewlett Foundation (and a member of the CEP Board) suggested during the Q&A in a friendly challenge to Enright on her Zappos example. Citing other companies without naming names, she observed – to knowing laughter from the crowd – that “sometimes unhealthy cultures seem to be associated with very fat profits.”
Enright allowed that this was certainly true, as it surely is. And, of course, Twersky wasn’t arguing that culture doesn’t matter. Indeed, in her excellent piece, Foundation Chief Executives as Artful Jugglers, she suggests that building a healthy culture is one of the essential responsibilities of effective foundation CEOs.
But the point is that culture alone is not the answer.
Related, and not mentioned during the session, is that, in the business world, there seems to be a bit of a backlash of late against the emphasis on corporate culture. This is manifested in rants against “forced fun” and other “culture-building” that, at their worst, can look like self-absorbed navel-gazing that is divorced from the imperatives of the work.
This skepticism is perhaps most prominently expressed on the April Harvard Business Review cover, which blares “You Can’t Fix Culture: Focus on Your Business and the Rest Will Follow.”
“When organizations get into big trouble, fixing the culture is usually the prescription,” write Harvard Business School Professor Jay Lorsch and his research assistant. “But the corporate leaders we have interviewed – current and former CEOs who have successfully led major transformations – say that culture isn’t something you ‘fix.’ Rather, in their experience, cultural change is what you get after you’ve put new processes or structures in place to tackle tough business challenges.”
Let’s set aside (if we can) the fact that, unbelievably, this conclusion appears to be drawn from a very (very) limited sample of four interviews with men (yes, all men) who run major corporations. Still, I think there is a healthy caution here: that the focus on culture should not be an end in itself. It’s about the work.
And, in fairness, Enright and the panelists certainly were making that argument, too. They discussed the relationship between culture, being transparent, continual learning and improvement, and getting and receiving feedback. Repeatedly, the discussion about culture became something much, much broader – a discussion about effectiveness.
“The closer we get to the community, to the people whose lives we are trying to improve, the more humble we will be,” said Pickett-Erway. “The more feedback that you can get the better.”
Yee, too, emphasized the link between “culture and organizational effectiveness.” She noted, for example, the importance to effectiveness of “hiring a diverse staff. We need people who can stand in somebody else’s shoes, who have experienced difference themselves.”
And Canales talked about moving from “transparency 1.0” to transparency that is about two-way exchanges.
We need, as the panelists did, to keep the focus on culture as a necessary element of effectiveness rather than promoting too much of an inward gaze among institutions that, in all honesty, are already often seen as isolated and insular. What I don’t want, and what I guess fear a little, is that some foundations will misread the encouragement to focus on culture as an invitation to spend endless hours on office space re-designs, staff personality tests, or trust-building exercises. These things all have their place (or at least the first two do) but in limited doses.
The culture conversation should be integrated with, not separate from, the conversation about goals, strategies, implementation, and performance indicators. My experience (for what it’s worth) suggests that what bonds a staff together best is a sense of shared purpose and alignment toward – and progress against – shared goals.
Put another way, culture is a crucial part of the effectiveness puzzle, but it isn’t a magic bullet.
I’m really excited to announce that I will be doing something a little different on the blog next week. I am attending the Grantmakers for Effective Organizations (GEO) conference in Minneapolis May 2nd – 4th, and GEO has asked me to curate a set of bloggers to report on the conference.
I have rounded up a rockstar group of bloggers who will be sharing their insights from the conference with you here on the blog. And the blog series will be reposted to the Minnesota Council on Foundations blog, which is a co-host of the conference.
GEO is made up of 500 member grantmakers who are working to reshape the way philanthropy operates and promote strategies and practices that contribute to grantee success.
The GEO conference is held every other year and brings together philanthropic leaders from across the country who all share a common vision for advancing smarter grantmaking practices that enable nonprofits to grow stronger and more effective.
Some of the sessions in this year’s conference that I am particularly excited about include: “Can Foundations Help Grantees Build Fundraising Capacity?,” “Real Costs, Real Outcomes. What Funders Need to Know,” and “Supporting Leadership Development in Social Justice Organizations.” In addition, there will be some really interesting plenary sessions about things like culture in philanthropy and philanthropy’s role in overcoming inequity.
It promises to be a fascinating conference.
So, starting next Tuesday, May 3rd you’ll be hearing from this great group of guest bloggers:
Phil Buchanan, President of The Center for Effective Philanthropy
Phil is a passionate advocate for the importance of philanthropy and the nonprofit sector and deeply committed to the cause of helping foundations to maximize their impact. Hired in 2001 as CEP’s first chief executive, Phil has led the growth of CEP into the leading provider of data and insight on foundation effectiveness. CEP has been widely credited with bringing the voice of grantees and other stakeholders into the foundation boardroom and with contributing to an increased emphasis on clear goals, coherent strategies, disciplined implementation, and relevant performance indicators as the necessary ingredients to maximize foundation effectiveness and impact. Phil is no stranger to the Social Velocity blog — I interviewed him here, and he guest blogged last summer here.
Trista Harris, President of The Minnesota Council on Foundations
In her role at MCF, Trista helps award more than $1 billion annually. Prior to joining MCF in August 2013, she was executive director of the Headwaters Foundation for Justice in Minneapolis, and she previously served as program officer at Minnesota Philanthropy Partners. Trista earned her master’s of public policy degree from the Humphrey Institute of Public Affairs, University of Minnesota, and her bachelor of arts from Howard University, Washington, D.C. She is a passionate national advocate for the social sector using the tools of futurism to solve our communities’ most pressing challenges and is a member of the trends in family philanthropy task force for the National Committee for Family Philanthropy.
Mae Hong, Vice President of Rockefeller Philanthropy Advisors
Mae is responsible for building RPA’s presence in serving individual donors, foundations and corporations throughout the Midwest. Bringing 18 years of nonprofit and philanthropy experience to RPA, she previously served as Program Director at the Field Foundation of Illinois. Mae actively participates in local and national philanthropic associations and networks, serving in leadership roles on committees, engaging in public speaking opportunities, and facilitating planning and execution of philanthropic initiatives. She currently serves on the boards of GEO, the Illinois Humanities Council and the Daystar Center. She is a past chair of the board of Chicago Foundation for Women.
And once the conference is over, I will plan to do a wrap-up blog post on my thoughts and insights from the conference.
If you plan to be at the conference, please let me know, I’d love to see you there! And if you can’t make the conference but want to follow the content from afar, follow the Twitter feed at #2016GEO.
Note: As I mentioned earlier, I am taking a few weeks away from the blog to relax and reconnect with the world outside of social change. But I am leaving you in the incredibly capable hands of a rockstar set of guest bloggers. Next up is Phil Buchanan, President of the Center for Effective Philanthropy (CEP), the leading provider of data and insight on foundation effectiveness. He is also a columnist for The Chronicle of Philanthropy and a frequent blogger for the excellent CEP Blog. Here is his guest post…
When it comes to the debate about the social impact of endowment investments, college and university campuses – not foundations – seem to be where the action is. Foundations have hundreds of billions of dollars in assets but, today, most of the large ones appear to be placing no restrictions whatsoever on how their endowments are invested.
Divestment is hardly a new issue, of course. In the late 1980s, when I was deciding where to go to college, many campuses were racked by a heated debate over divestment from companies doing business in apartheid South Africa. In the 1990s, the issue was divestment from tobacco companies. Today, a similar debate is playing out over fossil fuels, for-profit prison companies, and other investments
True, most college boards are still refusing to limit their investment options much, if at all. From what I understand, the arguments against divestment that get made in college and university – as well as foundation – boardrooms include that divestment doesn’t accomplish anything, that it’s a board’s fiduciary duty to maximize returns, and that ruling out some investments risks a slippery slope in which an increasing number of industries are ruled out for moral reasons.
But it’s a very live issue in higher education and some institutions are, in fact, drawing boundaries around how their endowments can be invested. They are deciding — usually after sustained student and faculty pressure — that their monies should not support certain industries.
Stanford University divested from coal companies in 2014 and, this year, Syracuse University divested entirely from fossil fuels. “Syracuse has a long record of supporting responsible environmental stewardship and good corporate citizenship, and we want to continue that record,” said the school’s Chancellor. “Formalizing our commitment to not invest directly in fossil fuels is one more way we do that.”
Earlier this summer, Columbia University made headlines as the first college or university to divest from the for-profit prison industry, following a student campaign. “This action occurs within the larger, ongoing discussion of the issue of mass incarceration that concerns citizens from across the ideological spectrum,” read a University statement.
But what about private foundation endowments — which Foundation Center estimates to be some $580 billion in total? Rockefeller Brothers Fund (RBF) received a lot of attention last fall with its decision to divest from fossil fuels. Was this decision part of a larger movement among funders?
Evidently not, or at least not yet, as the Center for Effective Philanthropy (CEP), the organization I lead, reported in Investing and Social Impact: Practices of Private Foundations. (The report was released in May and is based on a benchmarking survey of private foundations making at least $10 million in grants annually.) RBF is one of very few larger foundations to divest from fossil fuels, or from anything, for that matter — at least so-far. More than 80 percent of the 60 foundations that responded to this portion of our data collection effort said they screen nothing — not fossil fuel companies, tobacco companies, for-profit prisons, or anything else — out of their endowment investments.
Of the small proportion that do some screening, most exclude tobacco companies. Just three have divested their endowments from fossil fuels.
Time will tell whether the decision of RBF and a few others — and the accompanying publicity — will lead more foundations to reflect and then take this step. Of course, large foundations don’t face the kind of pressures colleges do — sit-ins by students, faculty votes, or pledges from alumni to withhold donations, for example.
Still, given all the discussion about aligning investing decisions and the pursuit of social impact, I was surprised how few foundations have placed any restrictions at all on their investments. I have spoken with some foundation CEOs and board members who make an impassioned argument that to do so would be irresponsible and pointless. Interestingly, though, few seem willing to make this argument against connecting investment decisions to social impact publicly.
On the other end of the spectrum in this debate is Clara Miller, president of the FB Heron Foundation, which invests “all our assets for mission.” Miller, who is quite comfortable making her case publicly, argues that foundations are doing “impact investing” whether they know it or not. “Foundations are investing 100 percent of their assets for impact; they just don’t know whether it’s positive or negative,” she said in this CEP conference session in May. “We have a duty of obedience to mission. And that applies to all of our assets.”
Wherever you come down on this debate, it’s probably fairly easy to agree that it’s an important one. I hope foundation boards will engage it.
As I mentioned earlier, it is so important to take time away to rejuvenate and reconnect with your passions, family and friends. So I am taking my own advice and taking some time off later this summer to connect with the world outside of social change.
And so for the second summer in a row I’ve asked a group of social change thought leaders to write guest blog posts in my absence (you can read last summer’s guest blog posts here).
I am so excited about this year’s group of amazing social change thinkers. They are experts in social change finance, philanthropy, political reform, outcomes data, organizational effectiveness and much, much more. They are smart, thoughtful, engaged and visionary leaders. And they are all helping to move social change forward in big ways.
Below is the lineup of guest bloggers with background information on each of them. Their posts will begin in late July. Enjoy!
Antony is the CEO of Nonprofit Finance Fund (NFF), a national nonprofit and financial intermediary where he oversees more than $340 million of investment capital and works with philanthropic, private sector and government partners to develop and implement innovative approaches to financing social change. NFF also creates the annual State of the Sector Survey. Antony writes and speaks on the evolution of the social sector and the emergence of the global impact investing industry. Prior to leading NFF he was Managing Director at the Rockefeller Foundation. He is the founding board chair of the Global Impact Investing Network and convened the 2007 meeting that coined the phrase “impact investing.” You can read my past interview with Antony here.
UPDATE: Here is Antony’s guest post.
Kelly is a program officer at the Hewlett Foundation working on their Madison Initiative, which focuses on reducing today’s politically polarized environment. Before joining Hewlett, Kelly worked as a strategy consultant with the Monitor Institute, a nonprofit consulting firm, where she supported a range of foundations’ strategic planning efforts. In addition to her experience as a strategy consultant, Kelly has worked with various nonprofit and multilateral organizations including Ashoka in Peru, the World Bank’s microfinance group CGAP in Paris, Technoserve in East Africa, and both The Asia Foundation and Rubicon National Social Innovation in the Bay Area. Kelly guest lectures on impact investing at Stanford’s Graduate School of Business and often writes for the always thoughtful Hewlett Foundation blog.
UPDATE: Here is Kelly’s guest post.
Phil is President of the Center for Effective Philanthropy (CEP), a nonprofit that is the leading provider of data and insight on foundation effectiveness. CEP helps bring the voice of grantees and other stakeholders into the foundation boardroom and encourages foundations to set clear goals, and coherent strategies, be disciplined in implementation, and use relevant performance indicators. Phil writes and speaks extensively about nonprofits and philanthropy and rarely pulls punches when he does. He is a columnist for The Chronicle of Philanthropy and a frequent blogger for the excellent CEP Blog. He was named to the 2007, 2008 and 2014 “Power and Influence Top 50” list in The Nonprofit Times. You can read my past interview with Phil here.
UPDATE: Here is Phil’s guest post.
Kathy is Organizational Effectiveness and Philanthropy Director at the David and Lucile Packard Foundation where she helps 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. Prior to joining the Foundation, she worked in a non-profit, on Capitol Hill, and in state and local government in California. Kathy serves on the board of Grantmakers for Effective Organizations and on the advisory committee for the Center for Effective Philanthropy. You can read my past interview with her here.
UPDATE: Here is Kathy’s guest post.
I asked David to be a guest blogger again this summer because he is so insightful and often points out things that few others in the sector are willing to acknowledge. He is Director of Analytics for Family Independence Initiative, a national nonprofit which leverages the power of information to illuminate and accelerate the initiative low-income families take to improve their lives. David is also the former founder of Idealistics, a social sector consulting firm that helped organizations increase outcomes, demonstrate results, and organize information. He writes his own blog, Full Contact Philanthropy, which is amazing. You can read his past guest blog post here and my interview with him here.
UPDATE: Here is David’s guest post.
In today’s Social Velocity interview, I’m talking with Lowell Weiss, President of Cascade Philanthropy Advisors, which provides personalized guidance to foundations and individual donors seeking to deepen their impact. Previously, he served in leadership roles at the Bill & Melinda Gates Foundation, the Morino Institute, and in the Clinton White House.
You can read past Social Velocity interviews here.
Nell: Why do the Leap Ambassadors believe now is the right time to introduce the Performance Imperative (PI) to the nonprofit sector? There have been past attempts to move the sector toward outcomes and performance. What makes this effort and this timing different?
Lowell: We don’t know if we’ll break through with this effort. But the 70+ members of the Ambassadors Community are committed to giving it our all, because we believe that performance matters more than ever. The social and public sectors are increasingly steering resources toward efforts that are based on a sound analysis of the problem, grounded assumptions about how an organization’s activities can lead to the desired change, and leadership that embraces continuous improvement.
High performance is all too rare in our sector today. In fact, we don’t even have a commonly accepted definition of the term “high performance.” The PI is our attempt to create that common definition and then start the process of creating guideposts to help nonprofits who are motivated to improve their performance for the clients and causes they serve.
We’re not aware of any other effort devoted to this mission-critical topic that has engaged so many top nonprofit executives, funders, and thought leaders as co-creators. Perhaps even more important, the PI goes beyond the typical focus on helping nonprofit leaders do things right. When leaders do things right, they can achieve strong operational performance but not necessarily meaningful results for beneficiaries. To achieve the results embodied in their mission statements, leaders must go the extra mile, through diligent internal monitoring and external evaluation, to ensure they’re also doing the right things.
Nell: Does the PI apply to any and all nonprofit organizations? Is it a measuring stick that any size and domain area nonprofit should use, or are there certain types of nonprofits for which this really works?
Lowell: We believe the insights in this document are most immediately applicable to nonprofit organizations with budgets of $3 million or more. But many of the basic management principles apply to organizations of any size, just in less-intensive ways. Some of the details have a special focus on organizations that provide direct services. We believe the overarching framework is relevant for organizations of almost any type.
Nell: What will keep the Performance Imperative from becoming a dusty document rather than a movement? What does success look like for this movement and how will you measure whether that happens?
Lowell: Let’s face it: The topic of high performance is not a lightning-fast meme that will spread like a left shark or right-wing conspiracy theory. It’s a slow, complex idea that will require patient, methodical work to advance. Hence the importance of the Leap Ambassadors Community, a group of leaders who care deeply about high performance and are willing to share the gospel with trusted colleagues and peers.
We believe that when leaders with strong beliefs and passion coalesce around a common purpose, they can build a collective power and influence to drive positive change. They can create an infectious enthusiasm to pull other like-minded players into a growing community of action. That can only happen when you take the time to build relationships, trust, quality work, and collective pride in that work. Overall, we’ll judge our success based on a) to what extent the PI becomes an established framework for increasing the understanding and expectation of high performance as a critical pathway to greater societal impact; and b) to what extent the Leap Ambassadors Community demonstrates itself as a thoughtful, knowledgeable, aligned community of leaders and earns respect, collaboration, and support from prominent players in the field.
To be more concrete about how we will know if we’re on the right track, we’ve established metrics for the growth and engagement of the Ambassadors Community as well as for the value of the PI itself. Here a few of the milestones we hope to achieve over the next year:
- 100‐150 ambassadors have jelled as a community and are truly aligned with the community’s purpose.
- At least 25 nonprofits commit to using the PI to assess their strengths and needs; increase the board’s focus on mission effectiveness; improve their professional-development and organization-building efforts; or otherwise use the PI as a North Star to guide their journey toward high performance.
- Three to five foundations adopt the PI for themselves and their grantees, and they begin to apply the PI in their grant decisions and grantee support.
- Three charity ratings or information providers build the PI into their offerings.
- At least two vendors prominently use the PI in their suites of products and services.
- At least two prominent nonprofit management and leadership programs incorporate the PI as a core staple in their products and services.
- At least one institution creates a prominent award aligned with the PI or adapts an existing award.
Nell: Where do funders and regulators fit into this push for higher performance in the sector? One of the things that holds nonprofits back from high performance is an inability to spend the money it takes to achieve high performance (money for infrastructure, evaluation, staff, etc.). How do we fix that and where does fixing that fit into the movement’s plans?
Lowell: Funders and regulators can and must play a role. Right now, I’m helping a multiservice agency transition from providing compassionate care to ensuring that its clients achieve meaningful, measurable, sustainable life outcomes. The agency is trying to live the PI. But here’s the sad reality: The journey toward high performance is making the organization’s development challenges harder, on net. That’s because there are so few funders who understand the value of high performance—and even fewer who reward it.
To make the leap to high performance, nonprofits need creative funders willing to think big with them—not just ask for more information on results. They need funders who understand that making the leap requires more than program funding and more than the typical “capacity-building” grant. They need funders who make multi-year investments in helping nonprofit leaders strengthen their management muscle and rigor.
That’s why we’re so supportive of the work of Results for America and the Coalition for Evidence-Based Policy, organizations that are helping governments to base funding decisions on evidence and results. And that’s why the Ambassadors Community is developing the case for high performance that we can start bringing directly to funders. Bridgespan Group Co-Founder and former Social Innovation Fund Director Paul Carttar and Center for Effective Philanthropy President Phil Buchanan are co-leading a working group of ambassadors to build the case for funders. They are planning to convene a dozen+ foundation leaders to help flesh out the most effective arguments and evidence we can assemble to persuade funders that they have a better chance of accomplishing their missions if they support their grantees’ pursuit of performance.
Photo Credit: Cascade Philanthropy Advisors
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
June was all about attacking some pretty fundamental roadblocks in the way of social change. From the pivotal “Pledge Against The Overhead Myth,” to a new database for all nonprofit organizations, to moving philanthropists from innovators to capacity builders, to ideas for growing the level of giving, it seems June was about putting everything on the table and exposing what stands in the way of progress.
Below are my 10 favorite social innovation reads in June. But, as always, add your favorites to the list in the comments below. And if you want to see my expanded list, follow me on Twitter, Facebook, LinkedIn, or Google+.
You can see the 10 Great Reads lists from past months here.
- The big news in June was GuideStar, Charity Navigator and BBB Wise Giving Alliance’s Open Letter to the Donors of America and their kick-off of the Pledge to End the Overhead Myth. The three nonprofit review organizations are on a quest to expose the destructive nature of the overhead myth.
- This exciting announcement was followed quickly by some great articles. Kjerstin Erickson’s (former Executive Director of FORGE) eye-opening post about how the overhead myth can ruin a great nonprofit. And Ann Goggins Gregory (most famous for the seminal Nonprofit Starvation Cycle article in a 2009 Stanford Social Innovation Review that arguably started the entire overhead debate) great post about what nonprofits can do to speed adoption of the idea of overhead as myth. And Phil Buchanan from the Center for Effective Philanthropy chimes in with what foundations can do. And writing on the Grantmakers in the Arts blog, Janet Brown seems to agree, arguing that “with more efforts for honest assessment and honest communication between funders and nonprofits, we can stop dancing solo and begin dancing as real partners.”
- Antony Bugg-Levine, from the Nonprofit Finance Fund, gets down to brass tacks, gleaning 3 things that funders can do to help nonprofits from the NFF’s most recent State of the Sector survey.
- Echoing these same themes, Dan Cardinali, President of Communities in Schools, argues in the Huffington Post Impact blog that “Philanthropists…must come to grips with their new role as capacity builders rather than innovators.” Amen to that!
- But the reality is that foundations aren’t using innovative tools already available to them. A recent study by the Indiana University Lilly Family School of Philanthropy found that only 1% of US foundations are using PRIs (program-related investments), which I think is an enormous missed opportunity.
- Keeping with their ultimate goal of building the data infrastructure necessary for social change to thrive, Markets for Good announces the new BRIDGE project, which assigns all nonprofits a “numerical fingerprint” so that we can eventually understand the global social sector at scale.
- The annual unveiling of philanthropic giving numbers shows the same result, giving as a share of Gross Domestic Product has not strayed far from 2 percent over the past four decades. Suzanne Perry offers some reasons why, past failed attempts to grow the figure, and new ideas for moving the needle.
- The Dowser blog interviews Patrick Dowd, founder of the Millennial Trains Project, a ten day transcontinental train journey where each of the 40 Millennial riders profiles a crowdfunded project to build a better nation.
- If you wonder whether social media can actually move social change forward, check out this fascinating case study. A Facebook app encouraging organ donation resulted in an initial 2000% increase in organ donor sign ups. Who knows if those rates will continue, but the experiment definitely demonstrates the power of social media.
- There is a lot of hype in the world of social innovation, and two contrarians offer some thought-provoking perspectives about digging beneath the hype. First Daniel Ben-Horin is fed up with social entrepreneurs who don’t realize what a long haul social change is, when he notes “This making a difference stuff, it turns out, can be a real grind.” And Cynthia Gibson argues that we need to create a culture within the social change space that “encourages healthy skepticism.”
Photo Credit: mindfire3927
In this month’s Social Velocity blog interview, I’m talking with Jim Canales. Jim is President and CEO of The James Irvine Foundation, the largest multi-issue foundation focused exclusively on the state of California. Under his leadership, the foundation has adopted a more targeted approach in its grantmaking programs, focusing on three areas — Arts, California Democracy and Youth — of critical significance to the state’s future. Jim also serves on the boards of Stanford University, the Monterey Bay Aquarium and the College Access Foundation of California.
You can read past interviews in the Social Innovation Interview Series here.
Nell: One of the four grantmaking principles of the Irvine Foundation is “Invest in Organizations,” meaning that you are committed to providing grants to build nonprofit organizations (evaluation, operating support, infrastructure). This is a pretty radical idea for most foundations. What do you think holds other foundations back from this kind of investment and what will it take to get more of them to embrace the idea of organization building as opposed to just supporting direct programs?
Jim: This question of general operating support versus project support has been an ongoing debate in the nonprofit sector, and I’d like to suggest that we may be creating for ourselves a false dichotomy that may not be helpful. I’d suggest we focus on the end goal, not the means. Let’s start by asking the question: How can we maximize impact toward the shared goals of a foundation and its grantees? By asking the question in that way, we naturally have to explore whether we are investing sufficient resources, in the right ways, so that our grantee can have the impact we both seek.
That’s how we try to approach our work at Irvine. At times, we may make grants for general operating support; in other cases, our grants would not be characterized that way – and yet we try to ensure we are investing the necessary resources for the organization to achieve its goals. That will, by necessity, require investment in the infrastructure or organizational development needs that are critical to success. Without that support, whatever project or program we’re funding can’t and won’t have the impact we both seek.
Another part of this question presupposes that foundation staff are able to recognize and address organizational needs. Because we believe that’s an important ability, you will notice that each of Irvine’s program directors has held senior positions in nonprofit organizations. Each of them brings an understanding of organizational development, financial management, board development and all that it takes for an organization to succeed and thrive.
Nell: The Irvine Foundation tends to be fairly transparent in its work and even does an annual survey to gauge how the foundation is viewed by grantees, the social sector, other philanthropists, etc. What do you gain from this survey and how do you integrate what you find into your work going forward?
Jim: This goes back to the time we adopted our current strategic directions in Arts, California Democracy and Youth. At that time, a task force of board members and senior staff explored the question: How will we know we are making a difference? Out of that exploration came a framework that we use to assess our performance on an annual basis, and one of the key elements of that framework is constituent feedback.
Feedback is critically important in philanthropy. If you look at foundation initiatives that have failed — and I would include some of our own — one common theme is that feedback loops were not sufficiently robust. Grantees often are reluctant to come forward with bad news or criticism. And our sector doesn’t have a strong track record of consistently gathering candid feedback from our various constituents, whether that’s grantees or other stakeholders.
Phil Buchanan and his colleagues at the Center for Effective Philanthropy have played a catalytic role in improving philanthropy’s feedback loops through CEP’s Grantee Perception Report and other assessment tools. Irvine has commissioned two grantee surveys from CEP over the last seven years. And last year, we commissioned a separate stakeholder survey gathering opinions from leaders in our fields and the nonprofit and philanthropy community in general.
In each of these cases, we have found the data immensely valuable and used it to improve our performance. And we’ve tried to be transparent about it: We posted the results of the grantee perception reports on our website, and, more recently, I described what we had learned from the stakeholder report of 2012. In all instances we have sought to describe how we intended to use these findings to improve our work going forward.
There does remain, however, one area we have not fully explored: So far, we haven’t done very much to gather feedback from the people who benefit from the work that we support, which is obviously a critical constituent for any foundation. But we are following what others are doing in this regard to see what they have learned and how it might apply to us. An example of that is YouthTruth, the national survey of high school students that CEP developed in partnership with the Gates Foundation. I commend the article that Phil and others authored in the recent Stanford Social Innovation Review on this very topic.
Nell: One of the things that came out of your survey was a desire to see the Foundation take more risks. What does taking more risks mean to the Irvine Foundation and how do you think you will go about doing that in the coming years?
Jim: We have to start by defining risk. At Irvine, we’re not interested in risk for risk’s sake. Rather we are trying to understand the relationship between risk and reward and our tolerance for ambiguity and even failure. In the context of philanthropy, I think risk is about trying to balance the need to invest our resources wisely, while also taking advantage of the fact that we have very few restrictions on how we invest those resources.
For those of us in endowed foundations, we have much to learn about risk-taking from our investment colleagues who think about it in the context of managing a foundation’s endowment. And we have benefited from discussions amongst our program and investment teams on this subject. Our investment colleagues are willing to take risks on investments that offer the potential for greater return. But they know that to maximize returns over the long run, you need to have a balanced portfolio. So it’s not just about taking lots of risks; it’s about balance and a portfolio approach.
And ultimately, part of taking risk is about being comfortable with failure and learning from it. As part of our annual report on the foundation’s progress, we have a section that covers what we’re learning from our programmatic work and how those lessons can be used to further improve our strategies.
Nell: The Irvine Foundation is very much focused on evaluation, yet outcomes measurement is still difficult for the majority of nonprofits to achieve, given that most nonprofit funding sources aren’t interested in funding it. How do we get past the catch-22 of not being able to find funding for evaluation, but increasingly needing evaluation to get funding?
Jim: We approach evaluation as a tool that enables us to understand the effectiveness of key programs and initiatives, to learn from the progress and challenges along the way, and to demonstrate the value of approaches that will have an impact. In our experience, it is important to think carefully at the outset about what stage of development the work is in and to align the evaluation accordingly. We cannot evaluate everything, so we need to be selective about when and why we choose to use this tool.
I see evidence of a change underway in how the social sector and philanthropy approach evaluation. There is emerging greater interest in tools for measuring progress and impact. The proliferation of assessment tools available from organizations like CEP and PerformWell suggest that we’re moving beyond talking about the problem to developing real solutions.
As a complement to this, we are broadening our understanding about the purpose of evaluation. More and more foundations view evaluation less as the thumbs-up or thumbs-down audit and more as a tool for learning, strategic refinement and improvement. It’s been interesting to see foundations create senior-level roles like Chief Learning Officer or Director of Strategic Learning, as an indication of the value and importance of this work. I am of the belief that the more we shift toward evaluation as a tool for learning and improvement, the more likely we can have the impact we seek. At the same time, that is not to suggest that we should not be clear-eyed about whether we are achieving what we set out to achieve, which is an important role for evaluation activity.
Nell: In 2010 President Obama appointed you to the White House Council for Community Solutions to come up with recommendations about how to address the large population of Americans aged 16 to 24 who are not in school or work. What do you think the role of the federal government should be in creating innovative solutions to “disconnected youth” in America? And what do you think is the role of government more broadly in social innovation?
Jim: It was a privilege to serve on the White House Council for Community Solutions with a group of committed and dedicated leaders from across the country. The experience underscored yet again the critical importance of building relationships between philanthropy and government. In fact, an interesting study on this topic of cross-sector partnerships was recently published by the University of Southern California’s Center on Philanthropy and Public Policy. One of its conclusions is that in many cities and states, we’re starting to see a concerted effort to develop and institutionalize more of these partnerships.
We know that many of the innovations that foundations are working on need the engagement and partnership of government to increase their impact and to bring those solutions to scale. A good example for Irvine is the ways in which our Youth program is partnering with state and local government to reform high school education in California.
For the past six years, our Youth program has been working to build the field of Linked Learning — an educational approach that integrates rigorous academics with career-based learning. It has demonstrated success at increasing high school graduation and college attendance rates. And after a lot of work, Linked Learning is now available to students in nine school districts in California.
This year, thanks to a pilot program sponsored by the state Education Department, an additional 63 school districts have committed to Linked Learning. When the program is fully implemented, Linked Learning will be available to more than a third of high school students in California. That’s not something that Irvine or the nonprofit sector could ever have done by itself. So for the state to be launching this kind of pilot program underscores the importance of these partnerships.
As for the work of the White House Council and its focus on what we called “opportunity youth,” the fact that the White House raised this up as a critical issue for our country was really important for this often-ignored population. And the Council’s work continues to live on: most recently, FSG issued a report that serves as a framework for how different stakeholders can improve outcomes for this population of youth who are neither in school nor participating in the job market.
For our part, the focus on out-of-school youth complements the work of our Youth program. A little over a year ago, we launched an initiative to extend the Linked Learning approach to this population as a way to help them re-engage with education. Improving outcomes for this population is so critical — it represents an immense opportunity for our economy and society and for the youth and their families who want to create a better future for themselves.