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 Kelly Born, program officer at the Hewlett Foundation working on their Madison Initiative, which focuses on reducing today’s politically polarized environment. Kelly also writes for the always thoughtful Hewlett Foundation blog. Here is her guest post…
In March of 2014, the William and Flora Hewlett Foundation launched a new initiative focused on US democracy reform, The Madison Initiative. The overarching goal is to “help create the conditions in which Congress and its members can deliberate, negotiate, and compromise in ways that work for more Americans.”
Our mandate is for a 3-year, exploratory initiative to assess whether and how the Foundation might be able to make a difference here. During this period, we are focused on three central questions:
- Are there solutions and approaches that are worth pursuing?
- Is there ample grantee capacity to pursue these ideas (or can we help build it)?
- Are there funding partners we can work with to make it happen?
In exploring this problem of congressional dysfunction we realized early on that, unfortunately, there don’t appear to be any silver-bullets that will solve this problem – it’s not as if campaign finance reform, nonpartisan redistricting, or increased voter turnout, taken on their own, would resolve our current democratic ails (even setting aside for the moment how hard it would be to actually achieve these changes!).
Regrettably, there is no clear consensus on what to do to improve the system, much less on how to do it. This may be, in part, why Inside Philanthropy awarded The Madison Initiative with 2014’s Big Foundation Bet Most Likely to Fail. Given this, our view has been that current congressional dysfunction is occurring in a system of systems (and sub-systems) that are interacting in complicated ways.
Early on we decided to develop a systems map rather than a theory of change to guide our work (working in close partnership with the Center for Evaluation Innovation and Kumu, collaborations we’ve written a bit about here). Theories of change typically outline desired (social or environmental) outcomes and then map backwards, linearly, to the activities and inputs necessary to achieve those outcomes. Systems maps are perhaps better suited for more complex, uncertain environments like democracy reform, where cause-and-effect relationships can be entangled and mutually reinforcing, rather than unidirectional.
Version 1.0 of our map includes more than 35 variables we believe are contributing to the problem, distributed across three key domains: Congress, Campaigns and Elections, and Citizens. In light of this complexity, rather than making an initial set of big bets on a few key variables, we have instead spread a series of smaller bets within these systems to see where grantees might gain traction, and what this reveals about the system’s more confounding parts.
The benefits of this approach are many – in fact, I cannot imagine effectively tackling this particular problem any other way. But employing this spread betting approach also involves a few challenges for us at Hewlett, and for our partners and grantees. The trade-offs are worth considering:
- We are acknowledging and respecting complexity, but this can sow seeds of confusion for our partners. Our approach has the essential benefit of taking into account the systemic complexity and interdependency of what we are trying to help change. We are avoiding over-simplifying and thereby misconstruing our reality (a good thing). But we are exploring more than 35 variables (ranging from deteriorating bipartisan relationships to the proliferation of partisan news media), with more than 60 active grantees. This approach can be hard to manage, and harder still to convey to others – especially anyone accustomed to a more linear and readily understandable theory of change.
- Our course correcting helps us learn, but has a real impact on partners. As we diversify our investments to learn more about what works, we will continue to learn more about which efforts are having the most impact on congressional dysfunction, and which are less germane to the problem. As we do, we will necessarily converge (and double down) on a few core interventions, while discontinuing others. This will mean disappointing organizations that we respect and had supported at the outset – an inevitable byproduct of this approach, but unpleasant for all involved.
- Our evidence-based approach risks coming off as overly academic. We are determined to avoid investing in solutions where there is not solid evidence to support their viability vis-à-vis our goals. This helps us avoid squandering funds on interventions that won’t, ultimately, work. But this approach also runs the risk of coming across as standoffish, academic, and idiosyncratic in the eyes of a practitioner-driven field that in some instances may be pursuing work that is harder to (or has yet to be) substantiated by solid research.
We’ve certainly got our work cut out for us. But we deeply believe that the social sector shouldn’t shy away from complex problems. We also believe that the benefits of this approach far outweigh the costs. It enables broad-based learning, and truly forces us to constantly re-think the grants we are making. Building in these tough choices, rather than forging ahead with a pre-defined strategy, requires that we not just learn, but that we act on what we discover. And fast.
In short, while beset by a few real challenges, we’re convinced that an emergent path is the best path forward. Surely we will place some wrong bets along the way. But, as a favorite colleague of mine often says, “it’s not like we’re selling cigarettes to children.” All of our grantees are doing great work – ultimately it will (not so simply) be a question of which of these lines of work is most likely to improve Congress.
In 2017, we will go back to our Board of Directors to discuss whether and how The Madison Initiative’s work will continue. In the meantime, we would love to hear how other funders have approached emergent problems like this – and how nonprofits might advise that we manage these inherent challenges as we progress?
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. First up is David Henderson, 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 also writes his own blog, Full Contact Philanthropy, which is amazing. Here is his guest post…
In early June I was invited to be on a data mining panel at the Stanford Social Innovation Review Data on Purpose conference. The conference was full of nonprofit executives interested in tapping the big data revolution for social good. Naturally, the panel moderator asked us panelist to weigh in on if, and how, data was changing the social sector. Characteristically, I turned a feel-good question into a critique of the state of analytics in the social sector, which I’ve written about elsewhere and will expand on here.
Data is not changing the social sector. I would argue it’s not changing the world either. While it is very likely that data is changing your world, I do not believe data is changing the world.
For all the talk about how data is revolutionizing the world and that software is eating everyone’s lunch, the fact is that for the over two billion people who have no lunch to eat (literally and figuratively), the impact of the data revolution is muted, if nonexistent all together. Changing the world indeed.
The corporate data revolution has largely been fueled by data exhaust. Data exhaust is comprised of the various digital breadcrumbs you and I leave all over the Internet but that we might not think about as data in a traditional sense. For example, companies like Facebook and Amazon don’t simply log data when you click “submit”, they track your every movement around the Internet, logging every click and clack, allowing unprecedented marketing optimization. All these additional metrics are data exhaust, as consumers are almost passively generating data marketers can capture and monetize for almost nothing.
On the social sector data conference circuit, countless data-wonk hopefuls mindlessly espouse all the incredible things nonprofits can do now that data acquisition costs have been driven almost to zero. This is nonsense, as the social sector has no such data exhaust analogue, which is why the social sector doesn’t truly have big data.
Nonprofits often work with populations with a number of barriers, which drives up the cost of data acquisition relative to for-profit counterparts. Just some of the data collection barriers nonprofits grapple with include working with populations with low levels of literacy or limited to no access to technology. How exactly is one going to generate digital exhaust without any digital possessions in the first place, or while working three jobs to support her family?
Obviously, you don’t. The barriers too many people face in this world are exactly why nonprofits are in the business of social change in the first place. But it is also why we are so poorly poised to capitalize on the alleged data ubiquity, as that revolution is not permeating class boundaries to the extent technology evangelists would have us believe.
Another reason why data is not changing the world, or rather, why the social sector is failing to change the world with data, is that by and large we simply are not investing in the necessary capacity to turn data into insights.
While a new “data for the social sector” company with an unfortunate misspelling of a common word seems to pop up every day, there are very few companies actually building the tools the sector needs to put data in to action. Meanwhile, our technological overlords in Silicon Valley are depressingly stuck on the assumption that innovation in the social sector means fundraising software. Sigh.
If we want to use data to change the world, we need to think beyond software tools and simple (if colorful) data visualizations. Nonprofits need to invest in building their own analytical capacity, both by hiring analysts and also by investing in the entire staff’s ability to be intelligent consumers of data analysis.
Illusion of Insight
Everyone loves the idea of being data driven, but very few organizations actually want to make the investment. My employer, the Family Independence Initiative (FII), did make that investment. In turn, FII is now able to not only run regressions and build decision tree models, but can continuously learn from its data, augmenting every level of the organization from Chief Executive to line staff.
That investment is not cheap. Worse yet, like any good analyst, I can be a major buzz-kill. Much of my time is spent explaining why a particular regression coefficient doesn’t necessarily mean we are super awesome. In fact, a good analyst can make you less sure of your social impact.
But facing the tough reality paves the way to real impact. We cannot collectively do more without exactingly quantifying how little we’ve accomplished. These are tough truths, and most nonprofits would rather assume the hypothesis of their greatness, leaving no room for data’s insights.
The Path Forward
Just because data is not changing the world does not mean data cannot change the world. I believe it can, which is why I do what I do. While by and large nonprofits fail to invest in rigorous analysis, organizations like GiveDirectly are leading by example, showing what is possible when fact is paramount to fundraising.
Ultimately, being data driven is less about statistical techniques and more about a relentless commitment to the truth. The truth is that data is not changing the world. But if we, as a sector, can elevate the truth above all else, then we might just be able to change the world after all.
June was an amazing month in the world of social change.
Most notably, the long fight for marriage equality was won with the Supreme Court’s ruling in Obergefell v. Hodges. It is moments like these where the long, arduous road towards social change makes sense. But that wasn’t all that was going on in the busy month of June. From “new” tech philanthropy, to the orthodoxies of philanthropy, to the oversight of philanthropy, it was all up for debate. Add to that some fascinating new ideas for museums, new data on how Millennials get their news, and a fabulous new blog about the history of philanthropy. It was a whirlwind.
And if you want to see past 10 Great Reads lists go here.
- The biggest news by far in June was the Supreme Court’s 5-4 ruling in Obergefell v. Hodges making gay marriage legal. In the ruling opinion Justice Kennedy writes: “As some of the petitioners in these cases demonstrate, marriage embodies a love that may endure even past death…Their hope is not to be condemned to live in loneliness, excluded from one of civilization’s oldest institutions. They ask for equal dignity in the eyes of the law. The Constitution grants them that right.” While this is a huge win for equality, I think the two really interesting parts of the story are 1) how relatively quickly gay marriage went from banned to law and 2) the various actors that made that social change happen. Some argue that Andrew Sullivan’s 1989 landmark essay in New Republic started the intellectual case for gay marriage. This New York Times interactive map shows how gay marriage went from banned to legalized state by state over time. And Evan Wolfson, founder of Freedom to Marry, describes the decades long struggle of nonprofit reformers and their donors, including the Haas Fund in San Francisco, to make marriage equality happen.
- A new blog, the HistPhil blog, launched in June to much acclaim. There is an enormous need for a historical perspective as we work to make nonprofits and the philanthropy that funds them more effective. HistPhil has already begun to provide that in spades with excellent posts on the Supreme Court ruling, among many other topics you will see below.
- Sean Parker, co-founder of Napster and founding president of Facebook, launched a new foundation and wrote a controversial piece in the Wall Street Journal about his “new” vision for philanthropy. Some found his ideas full of hubris, while others found him to be “an articulate evangelist for tech philanthropy.“
- And if that wasn’t enough philanthropic controversy for you, there were two other debates waging in June. First was the response to David Callahan’s New York Times piece, “Who Will Watch the Charities?” where he argued that we need greater oversight on nonprofits and their funders. Phil Buchanan of the Center for Effective Philanthropy quickly shot back that while Callahan raised some important questions, he ignored the complexity of the sector and reform efforts already under way. And then the two got into an interesting back and forth. Finally, Callahan wrote a follow up piece for Inside Philanthropy. Good stuff!
- Along the same lines, the other point of debate in June centered around a Stanford Social Innovation Review article where Gabriel Kasper & Jess Ausinheiler attempted to challenge the underlying assumptions in philanthropy. But now that we have a new expert on the history of philanthropy on the block, Benjamin Soskis from the HistPhil blog gave us a more accurate historical perspective about just what is and isn’t philanthropic orthodoxy.
- Michael O’Hare, professor of public policy at UC Berkeley, wrote a great long form piece in the Democracy Journal arguing that museums could become much more relevant and financially sustainable if, among other things, they began selling their stored artwork. Crazy controversial, but fascinating, ideas.
- Writing in the Stanford Social Innovation Review, Matthew Scharpnick cofounder of Elefint Designs, argued that recent ProPublica investigations of the American Red Cross uncovered our double standard for nonprofits. As he writes: “We are asking organizations to meet competing demands—many of which are at odds with how they are funded. We want nonprofits and NGOs to solve problems as effectively as private-sector organizations, and we want them to do it without any of the advantages and with far more constraints.”
- The Ford Foundation announced a sweeping overhaul in their grantmaking strategy. They will now focus solely on financial, gender, racial and other inequalities, and double their unrestricted giving. Larry Kramer, president of the Hewlett Foundation, described how he is closely watching this historic move. And Brad Smith, president of the Foundation Center, offered a view of how philanthropy has approached inequality.
- The Hewlett Foundation’s Kelly Born provided some interesting thoughts about what a new Pew Research Center report about how Millennials get their news means for civic engagement.
- And finally, on an inspirational note, Steven Pressfield articulated how “artists,” or really anyone hoping to bring something new into the world (a painting, a novel, a solution to a social challenge), should think: “As artists, [we believe]…that the universe has a gift that it is holding specifically for us (and specifically for us to pass on to others) and that, if we can learn to make ourselves available to it, it will deliver this gift into our hands.” Yes.
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.
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.
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.
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.
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.
There is an interesting report out today on the effectiveness of the Social Innovation Fund (SIF). Authored by the Social Innovation Research Center (SIRC), a nonpartisan nonprofit research organization, the new report details what has worked and what hasn’t in the six year history of the SIF.
Launched by the Obama administration in 2009, the SIF — a program within the Corporation for National and Community Service — provides significant funding to foundations that follow a venture philanthropy model by regranting that growth capital, along with technical assistance, to evidence-based nonprofits in “youth development, economic opportunity, and healthy futures” areas. In 2014, SIF expanded its efforts to include a portfolio of Pay for Success (social impact bond) grantees.
Now, 6 years on it is interesting to take a look back to understand what, if any, effect SIF has had on the nonprofit sector. The effect of the SIF is also critical given that, as of right now, the House and Senate have both defunded SIF in their respective funding bills.
To date, the SIF portfolio is made up of $241 million of federal investments and $516 million in private matching funds, which was invested in 35 intermediary grantees and 189 subgrantee nonprofits working in 37 states and D.C.
The SIRC report focuses on the current progress of SIF grants made during the first three years of the program (2010-2012). The report finds two clear positive results for the SIF so far. The SIF has:
- Added to the nonprofit sector’s evidence base about which programs work, and
- Built the capacity of nonprofit subgrantees, especially in the areas of “performance management systems, evaluations, financial management, regulatory compliance systems, and experience with replicating evidence-based models.”
On the negative side, however, the report finds that the SIF put real burdens on funders and nonprofits with its fundraising match requirements and the federal regulatory requirements. The report also finds that the SIF has had little effect on the sector as a whole because the SIF has not very broadly communicated their learnings so far.
To me, of course, most interesting are the report’s finding about capacity building at nonprofit subgrantees. There is such a need for nonprofit capacity building in the sector, and this was a clear goal of the SIF.
The SIF is one of few funders that do more than pay lip service to performance management by actually investing in building the capacity of nonprofits to do it. However, the SIF has been criticized for mostly selecting nonprofits that already had strong capacity. And indeed, the SIRC report finds that the SIF was most successful among those nonprofits that already had high capacity (in performance management, fundraising function, etc.) prior to SIF funding. Indeed, the report found that “poorly-resourced intermediaries working with less well-resourced community based organizations have been at a disadvantage.”
One SIF grantee in particular, The Foundation for a Healthy Kentucky, really struggled to build the capacity of their subgrantees whose starting capacity was so low. As they put it:
During the course of participation, it became clear that…[SIF] was really better suited for replicating existing programs or, at a minimum, investing in well-established programs that had some level of sophistication around organization systems and evaluation.
This mirrors earlier criticism of the SIF that it was set up to grow only those nonprofits that were already doing well, while those nonprofits that struggled with basic capacity issues were left out. The SIF has struggled to determine whether it is funding innovation (new solutions with limited capacity), or proven solutions (with a long track record and the corresponding capacity). It seems the two are mutually exclusive.
What the SIF is trying to do is such tricky business. To identify, fund and and scale solutions that work is really the holy grail in the social change sector. Certainly there are hurdles and missteps, but I think it’s exciting when government gets in the social change game in a big way. Six years is really too soon to tell. So I hope that this brief SIF experiment is allowed to continue, and we can see what a social change public/private partnership of this scale can really do.
To read the full SIRC report go here.
Photo Credit: Obama signs the Serve America Act in 2009, Corporation for National and Community Service
Because they are often incredibly driven by ambitious social change visions, tremendous empathy for the plight of their clients, and an overly developed gratitude to their board and donors, nonprofit leaders push themselves extremely hard.
In fact, nonprofit leaders are really quite excellent at self-denial. I see this all the time in my coaching practice.
But nonprofit leaders you must give yourselves permission to breathe. And I don’t mean an afternoon off, or a weekend without checking email.
I mean a real break. A break where you start to find yourself again.
Not yourself as a nonprofit leader, but yourself as a human being with interests, connections, and passions outside of your organization. Someone who explores the world around you. Someone who realizes that you are on this earth for a very short time and while your role in social change is absolutely necessary, it is not your only contribution, nor is it the only place you can (or should) find meaning.
Because let’s be honest, the only way a pace like yours ends is in complete social change burnout. By existing only on the unending treadmill of work, work, work and ignoring your very human need to reconnect with your passions, your spirit, your family and friends you are setting yourself up for eventual breakdown. And make no mistake, without you as leader at the helm, your nonprofit’s work will grind to a halt.
So during these summer months when things are perhaps a bit slower, give yourself permission to take an extended period of time away.
And I mean really away.
Turn off your phone and your email. Step back from social media (believe me it will still be there when you get back).
Without the constant deluge of information and demands on your time assailing you, you are free to hike the mountains, get a massage, take in an art exhibit, watch your children or your grandchildren play (and join them!), explore your hobbies, read an amazing book. It really doesn’t matter what you do, just that you do something different and meaningful. Embrace the parts of yourself outside of your social change job, those things that make you fully human.
You may even consider taking it further, as philanthropic thought leader Lucy Bernholz did recently with a “digital sabbatical” where she went offline (no email or social media) for six weeks. She found the experience incredibly rejuvenating: “Without the addictive stimulation and distractions of digital life it feels like my brain grew three sizes.”
As the daily glut of information continues to increase, it becomes more important than ever to take a breather, to embrace the quiet. There is tremendous value in reconnecting with what makes us human, not machine.
And let me assure you that I am giving myself this same advice. I know how hard it is to step away from the email and social media beasts. I’m as concerned as you are with letting people down or not making enough progress.
But I am slowly coming to realize that sometimes progress is found in the quiet. And sometimes it is enough — more than enough — to just be. To sit and watch the world in all its beauty float by and have absolutely no effect on it other than to appreciate it.
If you need help finding the space to do this, check out the Coaching I offer nonprofit leaders.
Photo Credit: pixabay
There was a great post on the Stanford Social Innovation Review blog last week that clearly articulates a dysfunction in the nonprofit sector and when recognized by nonprofit leaders and their funders could reshape the sector.
In the SSIR, veteran nonprofit leader Kristen Joiner argues that because 86% of Fortune 500 leaders are men and 70% of nonprofit workers are women “gender dynamics” often cripple the nonprofit sector:
Like the provider of old, heading off to the office for a day of work, the private sector is focused on money and profit. The nonprofit sector, as the nurturing caretaker, is charged with caring for the young, the sick, the elderly, and the poor…This creates a have-and-have-not situation, where one side holds the money and power, and the other side asks for an allowance to do their “good work,” trying to get traction but more often getting stuck in a rut created by this dysfunctional dynamic…Investors in the social sector make it difficult for nonprofits to gather the resources to measure and pivot as necessary for success. They are looking for the proverbial “good girl”—an organization that doesn’t rock the status quo, that gives them a credential to show they “care” or “contribute.”
Joiner’s argument is not a new one, in fact Robert Egger voiced it in a 2008 Chronicle of Philanthropy article, where he described how the modern nonprofit sector was born out of the gender biases of the mid-20th century:
[In the 1970s and 80s] the number of nonprofits in the U.S. exploded…[led by] tens of thousands of college-educated, stay-at-home mothers…Many of these “founding mothers” brought with them an internalized understanding of their “role”…As long as these new organizations limited their work to nurturing, feminized charity work…they were humored, and even honored. [And foundations were] often dominated by men who were charged with dispensing money made by other men. Foundations rarely awarded money that fostered independence for grantees…In these formative years, and even today, grants are primarily made to submissive organizations — those willing to jump through countless hoops, those that would not push back when confronted with short-sighted policies, and those that would make do with much less than they knew was needed to do the job right…The rules that govern our sector — indeed, the very nature of our how we view ourselves — is rooted in systemic sexism.
Although I have worked in the nonprofit sector for 20 years, this “systemic sexism” never occurred to me until I read Egger’s article a few years ago. But now I see it often. And while I don’t think sexism should become a shorthand for everything that ails the nonprofit sector, I do think nonprofit leaders, board members and funders must be more aware of the underlying forces at play, so that we can all work to overcome them.
There are several key areas where this systemic sexism results in an uneven playing field for nonprofits:
- Less Access to Capital. Businesses have access to various forms of capital (startup, mezzanine, risk), whereas nonprofits struggle to attract day-to-day revenue, let alone the capacity and growth capital they so desperately need.
- Inadequate Sales Function. In the for-profit sector, sales and marketing are a much researched, supported and heralded part of a business model because it is well understood that without sales there is no business. But in the nonprofit world, sales — called “fundraising”– is misunderstood, under-supported, and sometimes ignored by nonprofit leaders, board members and funders.
- Tighter Limits on Overhead. Although this is starting to change, nonprofits are often encouraged to spend only a small amount of money on infrastructure, administration and fundraising (overhead expenses), but for-profit companies can spend whatever it takes.
- Less Investment in Leadership. Business leaders are encouraged to invest in professional development, training, and leadership coaching, but a nonprofit leader often must figure it all out on her own.
- A Restricted Role in Politics
While businesses can spend millions on lobbying and supporting political candidates, nonprofit political action is much more restrictive.
And the list goes on. Many of the dysfunctions present in the nonprofit sector are rooted in years and years of sector inequality. If we hope to make social change more effective and sustainable, we must free the sector of these shackles.
Photo Credit: Campbell’s Soup
This spring I have been trumpeting the Performance Imperative, a detailed definition of a high-performing nonprofit released by the Leap Ambassador community in March. Today I continue the ongoing blog series describing each of the 7 Pillars of the Performance Imperative with Pillar #2: Disciplined, People-Focused Management.
With this second Pillar, the Performance Imperative obviously makes a distinction between “leaders” in Pillar 1, and “managers” in Pillar 2. There is a note in the Performance Imperative that “leaders” and “managers” are typically two separate people in nonprofits with budgets over $1 million. So this distinction, and perhaps this Pillar, applies only to larger nonprofits.
But I think there is actually application to any nonprofit. In any nonprofit there are leadership tasks (creating the vision, being the cheerleader, marshaling resources) and there are management tasks (making sure the trains run on time, putting each resource to its highest and best use). In smaller organizations both sets of tasks fall to the same person, yet they both still need to be performed well. So I think it behooves any size nonprofit to analyze whether they are BOTH leading and managing well.
Effective managers put organization resources to their highest and best use. They recruit, train and retain the right talent, they use data to make good decisions, they manage to performance, and they are accountable.
You can read a larger description of Pillar 2 in the Performance Imperative, but here are some of the characteristics of a nonprofit that exhibits Disciplined, People-Focused Management:
- Managers translate leaders’ drive for excellence into clear workplans and incentives to carry out the work effectively and efficiently.
- Managers…recruit, develop, engage, and retain the talent necessary to deliver on the mission.
- Managers provide opportunities for staff to see…how each person’s work contributes to the desired results.
- Managers establish accountability systems that provide clarity at each level of the organization about the standards for success and yet provide room for staff to be creative about how they achieve these standards.
- Managers acknowledge when staff members are not doing their work well…managers are not afraid to make tough personnel decisions so that the organization can live up to the promises it makes.
The Center for Employment Opportunities (CEO) is an example of how strong management is necessary to create a culture of high-performance. CEO employs people entering parole in New York State in transitional jobs at government facilities while helping them access better paying, unsubsidized employment. CEO Chief Operating Officer, Brad Dudding described to me how CEO management created, over the past 10 years, a culture and system of high performance.
Here is his story:
In the early years, CEO focused program performance on meeting individual contract milestones, not a set of unified organizational outcomes. They were proficient in collecting data and reporting it to funders, but did not use data to track participant progress, to make course corrections, and to manage to short-term outcomes.
In 2004 the Edna McConnell Clark Foundation provided CEO with a multi-year capital investment to:
- Create a theory of change as a blueprint for program intervention and outcomes measurement.
- Develop a performance measurement system to track progress toward those outcomes.
- Nurture a performance culture that uses data to understand program progress, build knowledge and correct performance gaps.
First, CEO management had to agree on a theory of change and the specific outcomes for which the organization would hold itself accountable. Next, management shared the theory of change with staff and demonstrated how each staff member contributed to its achievement through an all staff event, follow-up trainings and consistent messaging that the organization was entering an exciting period of change. CEO then adopted a new performance measurement system to reinforce the theory of change.
But reorienting the organization was not easy. Not everyone was ready to embrace a new culture of performance accountability and data tracking. CEO management was initially surprised by staff resistance and responded impatiently with compliance measures. Looking back, not enough time was invested in staff training and promoting the value proposition of new changes. At times it was an enormous effort to get front line staff to track and use data everyday to ensure participant goals were being met.
But the tipping point came when CEO promoted early adopters of the data system to management positions. These new managers were comfortable operating in a data-driven environment and holding others accountable to use data to track program participants’ progress. Once there was a group of strong managers in place, CEO’s performance culture started to take hold and program outcomes improved.
By 2010, CEO was managing to annual performance targets and short-term outcomes through staff’s real-time documentation and data analysis.
In 2012, the results of a three-year randomized control trial showed that CEO’s program resulted in a reduction in recidivism of 16-22%. But the evaluation also uncovered a need to improve CEO’s strategies for advancing long-term employment and for connecting individuals to the full-time labor market. In response, CEO created a job retention unit and developed innovative job retention strategies, including training programs and financial incentives for participants.
In 2013, CEO entered the New York State Social Impact Bond, the first state-sponsored transaction, through which CEO will serve 2,000 high-risk parolees in New York City and Rochester between 2014 and 2018. If CEO hits benchmarks and reduces the use of prison and jail beds by program participants, investors will be repaid their principal and will receive a return of up to 12.5% by the U.S. Department of Labor and New York state.
The tenets of a performance based culture — supportive leadership, disciplined managers, goal setting, data collection and analysis to track and improve outcomes — are now fully accepted by CEO staff and reinforced by management. CEO now has a highly developed system of tactical performance management, which allows the organization to know on a daily basis if it is delivering on its promise to its participants.
Photo Credit: Australian Paralympic Committee