In today’s Social Velocity interview, I’m talking with Amy Sample Ward, CEO of Nonprofit Technology Network (NTEN), the membership organization of nonprofit professionals who put technology to use for their causes. Amy leads a team dedicated to connecting individuals, organizations and campaigns in order to transition the nonprofit technology sector into a movement-based force for positive change.
Previously serving as the Membership Director at NTEN, Amy is also a blogger, facilitator and trainer having worked with groups and spoken at events in the US, UK and around the world. In 2013, she co-authored Social Change Anytime Everywhere with Allyson Kapin.
You can read other interviews in the Social Velocity Interview Series here.
Nell: For many nonprofit leaders, social media is still viewed as a sideline, rather than an integral, aspect of the work. How do you convince nonprofit leaders that social media can actually be a means of furthering their social change missions?
Amy: Social media really encompasses so many different tools and platforms. The probability that your community isn’t using ANY kind of social technology is pretty low. Every organization doesn’t have to use every tool out there. Quite the opposite! I encourage every nonprofit not to think of social media as time suck and “one more thing to add to the list”, but, instead, as a way to connect directly with community members on a much more regular basis than your other outreach in email or events. Select which platform or platforms you use by asking your community and listening first – this helps ensure that any time you do invest in social media is spent in the platforms where your community is active and you have the highest chance of success.
Nell: Because the nonprofit sector is so resource constrained, nonprofits have traditionally been somewhat insular and risk averse. How do nonprofits reconcile that approach to a growing need to be more open, collaborative, transparent and risk embracing?
Amy: If there’s fear about change, taking risks, or transparency, my suggestion is to take inspiration from and share responsibility with your community. As a nonprofit organization, you cannot fully achieve your mission on your own – you need your community to help you create lasting change in the world, so why not invite the community to help you create change in your work!
When you invite your community in, you start to embrace transparency. You also lessen the stigma of risks because you now have community members championing new ideas and helping you test and iterate to find the best approaches. You don’t have to fear changing when you are working closely with your community because doing so means working with people, and we all change every day.
Nell: On the flip side of that, is there a risk of becoming too consumed by social media and new technologies? Can nonprofits – and all of us really – become too enamored of every new shiny object at the expense of actually creating social change?
Amy: At the end of the day, we all have lots of work to do and don’t want to get distracted or bogged down by any one thing, whether that’s Facebook, Twitter, email, or meetings! I think the real risk is in letting your tools guide your strategic decisions. Social media tools are launching every day, sometimes with a lot of press coverage. It’s understandable that you could read a post or see another organization trying a new platform and think you should do it, too. Or, to let the functionality of a certain platform dictate how you decide to create and run a campaign. It’s critical that all staff have the resources and training to think and plan strategically about their work, identifying the tools last that align with their goals, community and audience, and your mission.
Nell: Technology is often considered “overhead” in the nonprofit world. How can nonprofit leaders convince funders and board members that investing in technology can have a significant return on investment?
Amy: The best thing organizations can do to prove this is by actually proving it: track and evaluate your own return on investment, share information about your budgeting and planning, and include clear information and analysis of the necessary technologies to do your work in every grant proposal and report. You can’t expect funders to invest in something if you aren’t able to convince them from the beginning.
Photo Credit: nten.org
Heather Mansfield’s newest book, Mobile for Good, is a nice complement to her 2011 book, Social Media for Social Good. This time around, she adds mobile to the “new media” mix and gives a detailed approach for nonprofit leaders ready to embrace changing technology.
In Mobile for Good, Mansfield sounds a warning call to nonprofit leaders. The tide of new media is swift and those nonprofit leaders who don’t embrace it will be left behind:
“Your nonprofit would be wise to assume and act upon the fact that more than 50 percent of your website traffic will occur on screens varying in sizes from one to six inches by 2016.”
And, contrary to popular belief, this shift is not just among the youngest generations of potential donors. Every generation – from Silent, Baby Boomers, Gen X, Millennials, to Gen Z – is increasingly discovering and giving to nonprofits online.
But Mansfield is not suggesting that nonprofits chuck all fundraising vehicles in favor of a singular new media approach. Rather, she urges nonprofits to embrace a multi-channel fundraising strategy, “using print, web, and email communications, and mobile and social media in order to appeal to donors of all ages and socioeconomic backgrounds.”
And in fact, reports on the death of email are unwarranted. In fact, it’s enjoying a rebirth:
“Email is not dying. It’s growing. Furthermore, every email address that your nonprofit accrues translates into $13 in online donations over a one-year period. If you think this trend is isolated to Gen X and older, it’s worth noting that 65% of Millennials subscribe to nonprofit e-newsletters.”
The key, however, is making sure that everything (your website, your e-newsletters) is responsively designed, meaning that it automatically converts to fit whatever is being used to view it (laptop, phone, tablet).
Mansfield urges nonprofit leaders to invest in new media. The nonprofit sector’s desire for free or very cheap technology solutions isn’t realistic anymore:
“It’s imperative that you find the funds and the tech know-how to position your nonprofit for future survival…One of the downsides of the rise in social media is that it has inadvertently resulted in nonprofits becoming overly accustomed to and dependent upon “free” online tools. This mindset is becoming destructive to the sector istelf…The era of free is over.”
Mansfield devotes a chapter to each of the main social media networks and gives tips and best practices for each. The problem with writing a book about such a quickly evolving space, however, is that it becomes out of date before it even hits the shelf (for example Facebook’s recent organic search changes, and LinkedIn’s discontinued Products and Services tabs). So you must view Mansfield’s tips in a larger context, and for real-time updates you can check out her Nonprofit Tech for Good blog.
Overall I think the book holds a good deal of value for nonprofit leaders, however, I do have two criticisms.
First, for the nonprofit leader already overwhelmed by new media Mansfield doesn’t effectively prioritize where to focus. By including all major social media networks and all new fundraising tools (including untested ones like Crowdfunding) she leaves the impression that there is an endless and equally valuable list of innovations to embrace. Without a framework for prioritizing where to focus it is easy for the already overwhelmed nonprofit leader to give up. She could have discussed the merits of focusing on some of the bigger bang for your buck social media networks (like Facebook) while letting others (Pinterest) go if time doesn’t allow. Or thinking through a nonprofit’s target audience and their habits and preferences in order to prioritize staff time.
Second, I must take Mansfield to task for perpetuating the nonprofit overhead myth – the idea that nonprofits should separate their “program” and “overhead” costs. As I’ve mentioned before, this myth is incredibly destructive to nonprofits by forcing them to hide or ignore the true costs of their work. In Mansfield’s “Online Fundraising” chapter, she lists 10 best practices, of which #6 is to “Include Program Versus Operating Expense Graphics,” suggesting that nonprofits create “a pie chart graphic that shows your low fundraising and operating costs.” She goes on to mention the Overhead Myth Campaign in passing, with no irony about how she is perpetuating the myth itself. Ugh.
At the end of the day, Mansfield provides a nice overview of the rapidly changing new media landscape and some great steps for what nonprofits can do to keep up.
Photo Credit: nptechforgood.com
There was a lot of talk in November about how we actually make the shift toward measuring outcomes in the nonprofit world. And the resounding theory was that we should start with funders and funding for evaluation. Let’s hope philanthropists are listening!
And speaking of funding, there were some fascinating articles about the financing of public parks and how philanthropic, corporate and public money all affect a very public good.
At the end of the day it’s always about money isn’t it?
Below are my picks of the 10 best reads in the world of social innovation in November. But as usual, please add what I missed in the comments.
- A fascinating article in The New Yorker unpacks some recent developments with the funding of New York City parks, the delicate balance between private philanthropy and public goods, and how both contribute to or detract from equality. Exploring a similarly murky delineation between public goods and corporate profit, this article from The Atlantic Cities describes a new trend in corporately-financed public parks.
- Writing in the Stanford Social Innovation Review, Christina Triantaphyllis and Matthew Forti argue that NGOs need to move from overhead measures to cost-per-impact measures. And funders need to help that shift happen.
- Phil Buchanan from the Center for Effective Philanthropy would agree, it seems. As he puts it, “Until foundations really step up and support nonprofits’ data collection, assessment, and improvement, we will not get the best out of our collective efforts.” Tell ‘em, Phil!
- But maybe the solution is more systematic. Ever the visionary, David Henderson offers an idea to make the shift toward impact by tying charitable deductions to outcomes. Crazy or brilliant?
- The nonprofit sector really needs to get over its inferiority complex, and to help, the University of San Francisco’s MPA program developed this great infographic on The Rise of the Nonprofit Sector.
- From the HubSpot blog comes some tips for how nonprofits can use social media to really engage people, and The Guardian in the UK offers the 5 characteristics of the top 30 nonprofit CEOs on social media.
- On the How Matters blog Jennifer Lentfer argues that the “social good industry” wrongly assumes “that in the developing world, nothing exists, i.e. that there’s a blank slate upon which our interventions can be built.”
- There are some great reports and data analysis tools recently released. For a start, you can dig into the foundation landscape, analyze nonprofit financial performance, or understand how content marketing and technology are being used for social good.
- Speaking of technology for social good, crowdfunding is becoming a bigger funding source for social causes, raising $2.7 billion in 2012. Lucy Bernholz rounds up the research on this emerging and not fully understood funding vehicle.
- And finally, a really cool example of truly public art has emerged in Milwaukee, Wisconsin.
Photo Credit: kakao-bean
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, 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.
I am far from a social media expert, but I have grown to love some social media tools. Twitter, Facebook and LinkedIn have been my favorites, while I still haven’t seen the value of Google+ (although if someone wants to convince me, I’m all ears). But the newest social media darling, Pinterest is fast becoming my favorite. And I think it holds an enormous opportunity for nonprofits.
Pinterest is a social media network based on images. If you find a recipe, a blog post, a pair of pants, a livingroom set, you can “pin” it to a board and share it with your followers. Similarly, if you see something someone else has “pinned” you can “repin” it to your board. Picture an enormous blank wall with individual bulletin boards organized by your interests.
For example, I currently have 12 “boards”. Some are not work-related like “Home” and “Healthy Recipes.” But the rest are directly related to Social Velocity and my passion for social innovation and the nonprofit sector, like “Nonprofit/Social Change Books,” “Nonprofit Campaigns,” “Cool Infographics,” and “Nonprofit Media.” That last board is actually a shared board among 40+ people and organizations where we can all add to and edit the board.
There are several things about Pinterest that I love. For fun last Saturday night I spent a couple of hours there just scanning and pinning (sad, huh?).
There have been many articles about the potential of Pinterest for companies. People can pin images of particular products and encourage their friends and followers to purchase. What a boon to business!
But I think Pinterest is a particularly powerful opportunity for nonprofits for several reasons:
- Nonprofits are naturally image-based. The every day work that nonprofits are involved in lends itself to compelling images: a child laughing while reading a good book, a hug from a case worker to their client, a new home, a beautiful piece of land conserved, an endangered animal. Include a compelling picture in every story you create about your nonprofit and pin it on Pinterest. You can also pin images from other places that relate to your passion and your mission.
- Nonprofits easily connect to passion. I don’t care how much you love that new vacuum cleaner, you cannot be as passionate about it as you are about the child you are tutoring. People launch nonprofits or donate to nonprofits because an issue really hits them at the core. They may have had a loved one die of a terrible disease, or they may absolutely love border collies. What the social change sector has in spades is passion. Pinterest is a natural place to share that passion and convince others of its worth.
- Female donors are a large and growing force. If you want to attract more of this increasingly influential philanthropic force you better find them where they are, and right now that’s Pinterest. 68% of Pinterest users are female. And they spend a lot of time there. You want to be part of that.
- Nonprofits are all about good story-telling. Pinterest is a natural place for storytelling. The Chronicle of Philanthropy has put together a great gallery of ways nonprofits tell their stories through data visualizations. Although the gallery isn’t on Pinterest, all of these images should be and probably will be soon. Images tell such a better story than words, and nonprofits have so many great stories to tell. Use Pinterest to do it.
If you want a quick guide to getting started on Pinterest, check out this great HubSpot post, although it’s focused on businesses, it definitely applies to nonprofits.
Get out there and give Pinterest a try. I think you’ll like it.
Photo Credit: Mashable
In this month’s Social Velocity blog interview, we’re talking with Craig Newmark, the founder of craigslist, the web-based platform that has fundamentally changed classified advertising. In early 2011, Craig launched craigconnects, his initiative to link everyone on the planet using the Internet in order to bear witness to good efforts and encourage the same behavior in others.
You can read past interviews in our Social Innovation Interview Series here.
Nell: You seem to be a different breed from other high-tech philanthropists. What is your philosophy about philanthropy? For you, what’s the best way to do it?
Craig: I’m a nerd, and can be somewhat simplistic. If there’s some area where I can help, I should to that. My broad theme is “technology for good”, where people work together using social media for the common good. So, I proceed on that basis, finding groups who are good at something, usually using tech, at least using social media for outreach, fundraising and more.
Nell: Why is Craigslist Foundation winding down? How and why did you come to that decision?
Craig: I’m not really a part of CLF, and I think the consensus was that it had run its course, and had accomplished a lot.
Nell: With Likeminded and craigconnects you obviously have an interest in making the social sector more transparent and integrated. Do you think that is happening? Are those working on social change (nonprofits, foundations, social entrepreneurs, social investors) getting better at sharing information and what will encourage that?
Craig: I feel that people in the social sector are starting to work together in more and better ways, but it requires folks like me to nudge them together. In particular, I’m chatting with nonprofits about promoting each other in social media, with little success so far.
Nell: A big part of craigconnects is to get nonprofits to collaborate more effectively. Collaboration is often a tricky concept in a sector where the reality of scarce resources breeds constant competition. How do you reconcile collaboration and competition in the space?
Craig: I don’t know yet, but will figure it out, with lots of help.
Nell: Part of the craigconnects model is that you vet the nonprofits that you showcase there based on ratings services like CharityNavigator and GuideStar, so what do you make of recent efforts to move nonprofit ratings systems to outcomes as opposed to use of funds? What are your thoughts on how we create meaningful ways to evaluate nonprofits?
Craig: I think that real measures of nonprofits will involve their effectiveness, but the means of doing so are still under development. Charity Navigator, GuideStar and GreatNonprofits are making real progress.
In this month’s Social Velocity blog interview, we’re talking with Jessamyn Lau. As Program Leader of the innovative Peery Foundation, Jessamyn helps shape the foundation’s strategy, develops programs, strengthens the foundation’s portfolio, and supports existing grantees. Jessamyn’s MBA from Brigham Young University and time spent with Ashoka U have given her the perspective and skill-set to help the foundation develop new methods to support and build the field of social entrepreneurship. Jessamyn is currently working with BYU’s Ballard Center to create the Peery Social Entrepreneurship Program (PSEP), a cross campus initiative providing opportunities for students and faculty to engage with social entrepreneurship through curriculum, experiential learning, and research.
You can read past interviews in our Social Innovation Interview Series here.
Nell: At the Peery Foundation you have done some really interesting experiments with social media, even adding an element of crowd-sourcing via Twitter to your strategic planning process. But recently you have gone back and forth about whether you want to continue your PFWhiteboard blog. What has your thinking been about how social media fits into the overall work of the Peery Foundation?
Jessamyn: One thing we know about social media is that it’s a good tool for is spreading the word about our partners and their work. 90% of what we post/tweet is about our portfolio partners. Every now and then we try to figure out how else to deliberately use social media. We’ve tried stuff that hasn’t worked (so we stopped doing it), and we’ve tried stuff that did seem to yield value for us and others. In general it’s still throwing spaghetti at a wall and seeing what sticks. Intuitively we think social media is a good thing for our creativity, learning, and listening, however, we don’t feel tied to it as a core part of our strategy or practice. When it makes sense we use it, when it doesn’t we don’t.
Nell: What do you think holds foundations back from using social media and embracing greater transparency? What do you think will make that change?
Jessamyn: The tricky thing with social media is it’s really hard to link it to outcomes. Even when tangible examples of outcomes are illustrated it’s often a first-mover advantage and not something that will produce the same results if everyone did the same thing. If foundations could see how social media directly led to more impact it would be an easier sell. It’s a similar story with transparency. Being transparent requires change, time, dedication and a certain amount of risk. Without a clear and strong argument for how that leads to more impact it’s easier not to take the risk and stay quiet.
Another issue is strategic planning, which, at times, can become more of a bane than a boon to foundations. When it comes to social media many foundations think they need a strategy and a full blown plan before they will start using it. As with many things it’s hard to know exactly how Twitter or Facebook will be useful until you give it a go and play around a
For the most part I think the change will only come with an increase of millennial philanthropists, foundation ED’s and program officers who come with a share-as-default mentality and bias towards creative experimentation in public.
Nell: You recently did a fascinating blog post about how the social entrepreneurship movement is encouraging young people to think they can solve the world’s problems, without much real world experience. How do we balance Generation Y’s zeal to find solutions with their youth and lack of experience?
Jessamyn: I don’t think I know the full answer to that, yet. My opinions on this point are still developing as the Peery Foundation works closely with BYU to build a cross-campus social entrepreneurship program. I’m not sure the overall problem is too much zeal or youth, or even too little experience -all of these things provide incredible value in the right context. I think what’s lacking are clearer expectations and support for students to build self-awareness and deliberate preparation in their development as social innovators. As I said, I’m still figuring it out -watch the PF Whiteboard over the coming months for more on this.
Nell: The Peery Foundation is one of few foundations that do mission-related investments. How did you decide to move into that realm and what do you think holds other foundation back from MRIs?
Jessamyn: Our primary function is to support and serve the social entrepreneurs we work with. We try to keep our funding as flexible as possible. Peery Foundation funding is generally unrestricted and the structure of a grant is often co-crafted with the entrepreneur. We have come to realize that entrepreneurs with differing business models, or at differing life-cycle stages, need different types of capital. Once we believe in a SE and their model for addressing poverty we want to always be open to providing the type of capital that they need at the time they need it.
We’re still at an early stage in developing our capacity to provide debt and other funding outside of philanthropy. In our philanthropic funding we’re not paper heavy and our agreements are very trust-based. It was definitely daunting to explore this new realm of traditional investment due diligence and contractual agreements. So far we’ve found the kind of support we need to help us make the leap fairly painlessly through the Toniic Network, and from sources such as Silicon Valley Community Foundation and University Impact Fund, and still feel like we’re able to retain our low-paper, trust based partnership approach to the extent that makes sense.
Nell: In some ways philanthropy has been a bit left behind by the impact investing movement. Why do you think that is and do you think philanthropic giving and impact investing will become more integrated?
Jessamyn: The potential of impact investing is huge, though I’m not sure I agree with the statement that impact investing (ii) has left behind philanthropy (charitable giving from individuals, corporations and foundations totaled over $290B in the US alone for 2010, impact investing is estimated at $50-100B in 2011). Though there is a lot of attention and discussion surrounding impact investing, there are still relatively few organizations actively channeling dollars to ii. Even in the future (when I think ii will absolutely eclipse philanthropy by the numbers), I see ii and philanthropy as very complimentary. In many cases philanthropic capital prepares the way for ii dollars, or continues to fund pieces of a model (overhead or continuing innovation) that ii capital can not.
Indeed, there are many incredibly efficient and effective models of social entrepreneurship with models not conducive to impact investment capital – they will probably always rely on philanthropic dollars. There will always be an important role for philanthropy to play. Philanthropy is the ultimate risk-taking capital. We should not lose sight of this or think that ii is here to replace philanthropy.
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