The Next Generation of Philanthropy: An Interview with Jessamyn Lau

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
little.

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.

Tags: Ashoka U, impact investing, Jessamyn Lau, Mission-Related Investing, Peery Foundation, Peery Social Entrepreneurship Program, PFWhiteboard, Philanthropy, Silicon Valley Community Foundation, social entrepreneurs, social media, Toniic Network, University Impact Fund

A Movement for Climate Solutions

After 90 days over 100 degrees, a complete lack of rain, and wildfires burning out of control, this summer in Texas has been a particularly bad one. Indeed, the weather around the globe increasingly proves that climate change is alive and well. Which is why this video is particularly inspiring. On September 24th people around the world took to the streets to demand action on climate change. Moving Planet inspired 2,000 events in 180 countries all bringing attention to the need for solutions. It was an inspiring thing to see.

If you’d like a little inspiration on a Friday, take a look.

Tags: climate change, environmental activism, Moving Planet, Social Entrepreneurship, social media

What I’m Reading

Someone asked me the other day how long it takes me to write a blog post. I told them the writing only takes about an hour or two. However, the reading and thinking about what’s being done, or said, or written about and what I want to add to the conversation takes many times longer. So, to that end, I thought I’d give you a list of the blog posts, articles, and books that caught my interest and really made me think in the past month…

• Punching at Your Own Weight in Social Media
• Philanthropy’s Next Decade
• Leadership to the Rescue
• The Social Innovation Fund One Year Later
• The Giving Pledge and the Opportunity of a Generation
• U.S. Lagging, Not Leading, Social Entrepreneurship
• Warren Buffett’s Philanthropic Pledge
• How Can Nonprofits Plan for Growth and Impact?
• The Networked Nonprofit
• Social Media Listening: You Don’t Have To Be Joey Chestnut on the 4th of July!
• Wall Street Saves the World!
• Getting Results: Outputs, Outcomes & Impact
• The Slacktivist Debate Continues
• Is All Entrepreneurship Social?
• Are You Crazy Enough to Change the World?

What caught your interest this month?  Add to the list in the comments.

Photo Credit: pixel0908

Tags: nonprofit growth, nonprofit leadership, nonprofit outcomes, Philanthropy, Social Innovation Fund, social media, The Networked Nonprofit, Warren Buffett

Don’t Go Blindly Into That Social Media World

Seth Godin has gotten everyone talking (some are even yelling) about his latest post that chastises nonprofits for not embracing change and getting on the social media bandwagon. Godin is irritated at nonprofits for not embracing these new tools to “focus attention and galvanize action” around their cause.  And the overwhelming amount of debate about the post  (Beth Kanter, Chronicle of Philanthropy, Tom Watson, to name a few) , has focused on whether or not nonprofits have embraced social media, whether they are “deer in the headlights,” whether they are risk averse, whether they “blow people away,” and so on.

This is a good debate, to be sure, but what interests me in all of this is a bigger question about the role of social media in a nonprofit’s overall resource engine. Social media is just marketing, right?  Some organizations have figured out how to tap into social media to spread the word, build a following and so on.  Some businesses have even seen a spike in sales.  That’s great.   But marketing through social media, just like any kind of marketing, has to have a bigger goal in mind.  You don’t market for marketing sake, and you don’t Tweet just because it’s cool and “everyone” is doing it.  Rather, you have to understand how that marketing activity (whether it is “free” or not, it still takes resources) is going to contribute to, or perhaps detract from, your bigger goal, which for nonprofits is to raise resources to execute on their mission.  So, in essence, nonprofits should be using social media to build donors, volunteers, advocates, supporters, right?  And as such, their use of social media has to be part of a larger resource plan.  Social media is another channel for the distribution of your message. You should not just go blindly into the social media world.  But don’t sit on your hands either, I get it.

I would argue that social media must be one component of a larger overall resource plan for a nonprofit, that brings dollars, volunteers, advocates, etc. in the door.  But first we need to take a step back to understand that resource plan.  Which brings me to a misunderstanding of fundraising in the nonprofit world and to my usual hero Dan Pallotta.  Pallotta’s blog posts are wonderful, and usually I read them while silent “Right Ons” and “Amens” stream through my head.  But his recent post on fundraising left me frustrated that Pallotta wasn’t stepping far enough out on the limb that he usually does.

Pallotta argues that fundraising is a dirty word in the nonprofit sector and organizations work as hard as possible to spend as little as possible on it:

Fundraising is the black sheep of the nonprofit sector. Charities spend as little as they possibly can on it. They talk as much as they possibly can about how little they spend on it. The watchdogs, the IRS, and donors deduct goody-two-shoes points from nonprofits in direct correlation to every dollar they spend on it. Institutional funders penalize charities for spending on it… By extension, fundraisers are the black sheep of the sector’s workforce; second-class citizens to the program staff who are in the trenches every day doing the real work of social change.

He laments this reality and suggests that we better integrate fundraising into the costs of the programs that nonprofits operate:

This is ass-backwards. Without fundraising there are no programs. The less we spend on it the less money there is for programs…We should make fundraising a program domain in and of itself — every bit as important as the medical research, social services, advocacy, and everything else it makes possible. We should consider all spending on it to be a critical “program” expense. Instead of disdaining it, we should invest in understanding and developing it, because unless we do, we’ll never have anywhere near the money we need to address the massive social problems we confront.

These are all valid points, but then I lose him at the end when he claims:

Institutional funders should take the lead…Fundraising should be every bit as prevalent on the lists of their program interests as health, human rights, and global poverty. And when they are, they won’t need to be giving program grants to health, human rights, or global poverty anymore, because the fundraising arms of the organizations they support will be able to fund them on their own.

Huh?  I agree with Pallotta that there needs to be more risk and experimentation with fundraising.  But I would take this much further.  Fundraising isn’t just a “necessary expense,” rather a nonprofit’s resource engine must be fully integrated with and equal to its programs and operations.  We have to move away from the term “fundraising,” which has come to mean galas, direct mail campaigns (which Godin abhors), and foundation grants that are conducted in a vaccuum completely separate from and organization’s programs and operations.  Fundraising has become akin to a gerbil on a treadmill where nonprofits go from grant to grant, direct mail response to direct mail response, email campaign to email campaign, working their fundraisers to the bone trying to make the dollars coming in the door equal the dollars going out the door to run their programs.

That is “ass-backwards.”  The only effective way for a nonprofit to achieve its mission, and ultimately social impact, is to fully integrate their programs (the social impact they are trying to achieve) with their core competencies (what they do better than anyone else) and their overall resource engine.  This overall resource engine must be a diverse combination of activities that generate support for and work with, not detract from, the mission of the organization and the organization’s core competencies, like this:

I’ve written about this critical alignment before, and it seems to me that this integration of the three core activities of a nonprofit are rarely integrated effectively, or even recognized by those commenting on the sector, like Pallotta and Godin.  Any marketing or revenue-generating activities that a nonprofit embarks on must be chosen and invested in–with resources like money, staff, board and volunteer time–in accordance with the organization’s mission and core competencies.  And the marketing and revenue-generating activities from which a nonprofit can choose include things such as: individual donor cultivation, solicitation and stewardship; direct mail acquisition; online fundraising; foundation grants; earned income businesses; and yes, even social media.  Just as nonprofits should not shy away from social media because they are afraid of risk and change, they also shouldn’t run towards it if it doesn’t make sense in the overall picture of how they can effectively integrate their mission and core competencies to create a sustainable resource engine.

Nonprofits shouldn’t fear social media, nor any other technological, social, or financial shift in our world.  Nonprofits, just like any other entity, need to be aware of their environment and adapt their business to survive and thrive in that changing environment.  But it all has to be based on an integrated strategy.  Yes, be open to new things like social media and experiment to see how this new development might enhance or contribute to your mission, and your resource engine, while working with your core competencies.  But don’t blindly go there without understanding how it fits.

The bottomline is that the pace of change is speeding up for all of us.  Nonprofits have to be more open to change, yes, but any change still has to be digested and made part of an overall strategy that integrates mission, competency and resources.  I think Godin would be the first to agree that we are nothing without an integrated strategy.  So don’t jump on that bandwagon without one, just because Godin tells you that you are “paralyzed in fear.”

Tags: Beth Kanter, Chronicle of Philanthropy, Dan Pallotta, Fundraising, Marketing, nonprofit, Seth Godin, social media, Tom Watson

New Results in the Social Media Fundraising Debate

There has been much debate about how effective social media, particularly Facebook, can be at fundraising for nonprofit organizations.  An article last April in the Washington Post touched off a heated debate by claiming that the Facebook Causes application, which helps supporters of a nonprofit get their friends to donate, has not done much to increase overall fundraising.  As the article argued:

The Facebook application Causes, hugely popular among nonprofit organizations seeking to raise money online, has been largely ineffective in its first two years, trailing direct mail, fundraising events and other more traditional methods of soliciting contributions. Only a tiny fraction of the 179,000 nonprofits that have turned to Causes as an inexpensive and green way to seek donations have brought in even $1,000, according to data available on the Causes developers’ site…[and] fewer than 1% of [people] who have joined a cause have actually donated money through that application.

Beth Kanter, Allison Fine, and many others jumped all over the article and its analysis.  Their ultimate argument is that social media is just another tool in a fundraiser’s toolbox with which to build relationships with potential donors.  Just as you build relationships over time offline, you have to do so online, and Facebook Causes (and Twitter, and blogs, etc) are another way that nonprofits can spread their net and spread their message and attract followers who can help spread the net, etc.  As Allison pointed out:

Causes on FB enables us to tell our own world – distinct from the world -  about the issues, campaigns, orgs that they are passionate about. We can bring our networks of friends, our ingenuity, our passion, our time, our expertise to support causes.  It enables lots and lots of people to learn about causes and to share them with their friends easily, quickly and inexpensively…The bottom line here is that Causes isn’t just about raising money, it’s also about raising friends and awareness, and in the long run turning loose social ties into stronger ones for a cause may be more important than one-time donations of $10 and $20 dollars right now. Our rush to judge this application effective or ineffective over a very short time period with a primary user base of very young people is off base.

So I am rehashing this argument because an online fundraising company, Charity Dynamics, (which happens to be headquartered in Austin) has just had some revenue-raising success with a new Facebook app they created called Boundless Fundraising. This app allows people to extend the fundraising activity they are doing for a nonprofit into their social media profile pages.  Charity Dynamics just announced this week that the application has seen some pretty impressive financial results just in its first 6 months.  36 organizations currently use the app to increase support and giving for more than 2000 events, and they’ve raised $2.5 million so far this year.

That’s a pretty impressive number, so I asked Donna Wilkins, President of Charity Dynamics, how much of this is new revenue for these nonprofits, and she replied:

The great thing is we’re finding that about 75% of the donations are from new constituents vs a range of 40-60% for other donations for these events. Traditionally when someone fundraises for one of these events through Convio or Blackbaud, they send an email to friends and family requesting support.  The biggest hurdle for participants is sending the email and deciding who to send it to.  Boundless Fundraising application sends a newsfeed that all your Facebook friends see with just a couple of clicks. For most participants this means more friends are hearing about their participation and fundraising.  We had one great story where a participant told us she got a gift from someone and she doesn’t even know the person’s email address.  This is a great example of a friend of a friend who supports the cause. We’re also seeing that participants are now becoming multi-channel marketers and they’re asking for support both in email and on Facebook.  In some analysis you can see where a donor made a gift both in response to an email and through Boundless Fundraising.

So 15-35% (or $375-875K) of the money raised is new money. And that’s just in 6 months.  That seems pretty impressive to me.

The point is that social media is a new tool available to fundraisers.  It’s not a magic bullet, but it if you view it as a new, effective way to find and further connect with donors, you could be on your way to raising more money over time.

Tags: Allison Fine, Austin, Beth Kanter, Boundless Fundraising, Charity Dynamics, Facebook Causes, Fundraising, social media, Washington Post

The Fundraising Payback of Social Media

There’s much talk lately about social media (Facebook, MySpace, Twitter, blogs, etc.).  In fact it can at times feel like the beginning of a cult.  And there is increasing pressure on nonprofits, in the midst of an increasingly difficult fundraising climate, to jump on the social media bandwagon.  Blogs and journals are riddled with articles about how to dip your nonprofit foot into the social media space.  And there are some good tips.  But the bottom line of all of them is just to try something, jump on Twitter, set up a Facebook page, start a blog.  You don’t need to do it all, just pick something.

But in the middle of everything else a nonprofit staff is working on, with tapped out resources, an increase in demand for their services, and doubled efforts in fundraising it can seem that social media is just something for which there is no time or resources.  And what is the payoff anyway?

Well, Roger Craver, a fundraising consultant with The Agitator, has done some pretty interesting calculations on what the fundraising payoff to experimenting with social media could be.  For an organization with 100,000 donors, a social media fundraising campaign, asking donors to reach out to their networks and fundraise for you, could raise over $500,000.  The nonprofit provides a social media tool, for example a Facebook, Twitter or other tool that their donors can use to encourage their friends and family to contribute.

Craver has some interesting math, but basically the idea is that 2.5% of a donor base could raise $210 each.  So, for an organization with 100,000 donors that translates to $525,000 per campaign.  He doesn’t extrapolate this to smaller organizations and really all of this is projection anyway, but what if?  Take an organization with a donor base of 10,000 people.  2.5% of those people raising $210 each would be $52,500.  This is for one campaign that probably cost the organization nothing, beyond minimal staff time.  That’s pretty impressive.  That could replace the revenue from a time-intensive and expensive gala.

But how does an organization get started?  There are two simple solutions that have been generated here in Austin.  First, Charity Dynamics created a Facebook application that allows nonprofits to do this very thing.  And Kimbia helps you create a very easy online fundraising widget that people can send out to their networks.  There are also some Twitter applications, like Twitpay that allows people to donate to organizations via a PayPal-like extension of Twitter.  Donors simply Tweet their donation amount to their intended recipient, in any amount under $50.  And new applications are being developed every day.

So don’t be afraid.  Just get out there and try it.  Despite the many social media “experts” out there, this space is new for all of us.  All of it is an experiment.  There’s no such thing as failure.

Tags: Charity Dynamics, Facebook, Kimbia, MySpace, social media, Twitpay, Twitter

Social Innovation Jobs, Part 2

As promised, another of my clients is hiring.  ACTIVE Life (formerly Youth InterACTIVE) works to fight the national obesity epidemic by driving demand for healthy, ACTIVE lifestyles and making these lifestyles more accessible.

They are looking for a Vice President of Business Development to grow revenue from corporate, individual, foundation and earned revenue sources. This is the first time ACTIVE Life has had a position like this.  It is an exciting opportunity to help this social media organization build their social enterprise and philanthropic revenue.

You can see the full job description here.

Tags: ACTIVE Life, social media

Social Media for Nonprofits: How and Why

If you are a nonprofit manager struggling with social media (what it is, how to use it, whether its a good idea for your organization or not) read this great post by Amy Southerland, a communications consultant for nonprofits. Social media is Internet and mobile applications for sharing information and ideas.  It includes blogs, Twitter, LinkedIn, Facebook, MySpace, etc.  I’ve written about social media and fundraising before.  But Amy gives a great, easily understood overview of what social media is, why nonprofits need to jump in and how they can get started.  She also includes a couple of examples of nonprofits that have really used social media effectively.

Tags: Facebook, LinkedIn, MySpace, social media, Twitter