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William and Flora Hewlett Foundation

Nonprofit Capacity Building Works: An Interview with Kathy Reich

In this month’s Social Velocity interview, I’m talking with Kathy Reich. Kathy leads the Ford Foundation’s BUILD initiative both in the United States and in 10 global regions. BUILD is an essential part of the foundation’s strategy to reduce inequality, a strategy arising from the conviction that healthy civil society organizations are essential to driving and sustaining just, inclusive societies. To that end, Kathy guides Ford’s efforts to implement sector-leading approaches to supporting the vitality and effectiveness of institutions and networks that serve as pillars of broader social movements.

Before joining Ford in 2016, Kathy was director of organizational effectiveness and philanthropy at the David and Lucile Packard Foundation, where she led a cross-cutting program to help grantees around the world strengthen their strategy, leadership and impact.

Kathy has long been a friend of the Social Velocity blog. You can read my interview with Kathy when she was at the Packard Foundation here and a guest blog post she wrote for the blog here.

You can also read interviews with other social changemakers here.

Nell:  You recently moved from the Packard Foundation to the Ford Foundation in order to launch their BUILD initiative, which is all about strengthening organizations. What are your goals with this new initiative and what successes have you seen so far? And what are you finding in terms of the areas where nonprofits need most help?

Kathy: The Ford Foundation has two big goals in mind for BUILD. First, we want to foster a measurably stronger, more powerful set of civil society organizations and networks working to address inequality around the world. Second, we aim to build understanding within the Ford Foundation, and ultimately throughout the field of philanthropy, about how strengthening key institutions can advance social justice.

The foundation has committed $1 billion over five years to BUILD because we believe that the fight against inequality needs resilient, durable, and fortified civil society institutions. Individuals and ideas also are critical, but the key role of institutions as drivers of sustained social change is a core, and sometimes overlooked, aspect of social justice work.

Each of the BUILD grantee organizations and networks will receive five years of support, at levels higher than what they have historically received from the Ford Foundation. Much of this support will be as flexible as we can legally make it; most grants will include generous general support. The remainder of each BUILD grant will provide support for nonprofit organizations and networks to strengthen their strategies, leadership, management, and finances. Each BUILD grantee will develop and then implement its own institutional strengthening plan. Although Ford Foundation staff will consult on drafts of these plans, the grantee will be “in the driver’s seat” in determining their institutional strengthening priorities and how best to address them.

So far we’ve made about 90 BUILD grants, and honestly it’s a bit early to say how well they are working. We do know where organizations are planning to spend the money. The vast majority of BUILD grantees, 79 percent, are choosing to strengthen their core operations, investing in areas such as financial management, fundraising, communications, evaluation, and HR. About two-thirds also are investing in strengthening capacities critical to social justice work, such as legal, research, network building, and advocacy. Close to half are investing in strengthening their strategic clarity and coherence, 36 percent are investing in leadership development and governance, and 32 percent are choosing to deepen their organizational commitments to diversity, equity, and inclusion.

It’s important to note that BUILD is not the Ford Foundation’s only investment in strengthening nonprofit institutions. BUILD is part of FordForward, the Ford Foundation’s multi-pronged effort to make philanthropy part of the solution to inequality in a deep and lasting sense. In addition to BUILD, two other aspects of FordForward focus on strengthening nonprofits. The foundation is giving more general support grants across all program areas, with a goal of making general support our default type of grant whenever possible. We also are increasing overhead rates on project grants to a minimum of 20 percent, to more adequately address the indirect costs of executing projects and programs.

Nell: This is a pretty innovative approach to capacity building, how do you plan to share what you learn with other funders and with the sector overall?

Kathy: We’re planning a robust evaluation and learning strategy, although we’re really just getting started. Our hope is to share some early findings by year’s end. We’ll be focusing on three sets of key questions throughout the five-year initiative:

  • Do BUILD grants work? Do the organizations and networks that receive this funding become stronger and more durable over time? And if so, what if any impact does that have on the organization’s effectiveness?
  • If the BUILD approach works, what about it works? Is it the general operating support, or a specific kind of organizational strengthening, or something else?
  • Have we changed the way we do business at Ford, moving away from one-year project grants in favor of larger, more flexible grants?

Along with our evaluation and learning plan, we’re also developing a communications strategy to share what we learn with the field and engage in dialogue with others. We’ll be publishing evaluation results, speaking at conferences, and making active use of social media.

Nell: Both the Ford Foundation and the Packard Foundation are rare funders in that they are very committed to creating strong nonprofit organizations through heavy investment in capacity building. Do you think philanthropic and government funders are starting to follow your lead? Or what will it take to make that happen?

Kathy: Well, we certainly hope they are! It’s important to acknowledge that capacity building grantmaking is not new; in launching BUILD, we’ve learned from and appreciate the work of leaders in this field like the David and Lucile Packard Foundation, as well as the William and Flora Hewlett Foundation and the Evelyn and Walter Haas Jr. Foundation.

Over time, we hope that the ranks of capacity building funders will grow. We hope that BUILD will influence other donors by contributing to the evidence base that nonprofit capacity building works—that stronger, more durable, and more resilient organizations and networks are more effective at achieving their missions.

We also hope to contribute to the evidence base about what kinds of capacity building work best for organizations and networks of different types and sizes, working on different issues in diverse geographies. That’s a tall order, but one of the great things about being a global funder and being able to invest significant resources in BUILD is that we’re able to try this grantmaking approach with a broad range of institutions.

Nell: The Ford Foundation made a very public move two years ago to focus their efforts on fighting inequality. But that goal has arguably become harder given the political winds. How does a foundation like Ford navigate achievement of their desired impact in a potentially more difficult external environment?

Kathy: The Ford Foundation has worked in the U.S. and around the world for more than 70 years, and we’ve seen a lot of upheaval during that time. We’re acutely aware of the challenges facing our work, but we’re moving ahead with optimism and with what my boss Darren Walker calls “radical hope.”

BUILD is a big part of that hope. I believe strongly that in uncertain times, a BUILD approach to grantmaking is one of the smartest choices a foundation can make. By giving our grantees multi-year general operating support, we are giving them the resources and the flexibility to pivot their work quickly in the face of new realities. By also giving them thoughtful and flexible institutional strengthening support, we are enabling them to invest in their own leadership, strategy, management and operations at a time when they have to be at the top of their games.

Photo Credit: Ford Foundation

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10 Great Social Innovation Reads: Dec 2016

Let’s be honest, December was about just trying to make it through the end of 2016.

But where there is darkness there is also light. And many of the discussions and posts in December actually uncovered a lot of bright spots in an otherwise very trying year. From the success of the Dakota Access Pipeline protests, to a surge in donations to nonprofit journalism, to potential progress on climate change, to the future of philanthropy, there was much promise. Perhaps I was just looking for it,  but I saw lots of hope in December.

Below is my pick of the 10 best reads in the world of social change in December, but please add to the list in the comments. And if you want a longer list, follow me on Twitter @nedgington.

You can also read past months’ 10 Great Reads lists here.

  1. In perhaps the best blog post title ever, “8 Reasons Why 2016 Wasn’t a Total Garbage Fire” Marie Solis reminds us that there was actually some exciting progress in 2016.

  2. For example, the Standing Rock Sioux protests against the Dakota Access Oil Pipeline found success when the US Army Corps of Engineers decided not to approve an easement to allow construction of the pipeline under Lake Oahe. And Tate Williams, writing on Inside Philanthropy, finds lessons for philanthropy in this social movement: “Supporting movements like Standing Rock likely means challenging grantmaking norms, loosening up requirements, taking chances, and moving much faster than foundations may be accustomed to.”

  3. December also saw a glut of donations to nonprofit journalism outlets, like ProPublica and the Center for Public Integrity, to name a few.  And indeed, in the wake of the Trump election, funders like the Omidyar Network are increasing support for civic technology, solutions aimed at getting people more civically engaged.

  4. It looks like despite the new administration’s anti-environmental leanings, clean energy will continue to grow. Backing this trend, the Breakthrough Energy Coalition led by Bill Gates, announced a $1 billion fund to finance zero-carbon clean-energy technologies. And David Roberts writing in Vox argues that cities, rather than the federal government, may actually need to lead the clean energy effort: “Now that the US federal government is getting out of the climate protection business, at least for four years, [cities] are more important than ever…Cities generate most of the world’s economic activity, innovation, and cultural ferment. They also generate a growing share of its carbon emissions…Urban areas are also first in line to feel the effects of climate change…If they hope to avoid worse to come, cities will need to almost entirely rid themselves of carbon over the next few decades.”

  5. Writers at The New York Times offer two ways to move on from 2016, start small and lift up those around you.

  6. The Hewlett Foundation celebrated their 50 year birthday with a symposium on the history of philanthropy. In addition to the interesting #Hewlett50 Twitter feed, the foundation commissioned this very interesting paper from Benjamin Soskis and Stanley Katz  (of HistPhil blog fame) on the past 50 years of philanthropy.

  7. Aaron Dorfman, President of the National Committee for Responsive Philanthropy, offers a call to action for philanthropists in the Trump era.

  8. A new report from The Women’s Philanthropy Institute at the Indiana University Lilly Family School of Philanthropy reveals that Generation X and Millennial donors are giving less than their Boomer and Silent Generation counterparts did at their age, but women’s influence on philanthropic decisions is growing.

  9. And a small, but very positive thing that came out of the presidential election is that it has brought philanthropic thought leader and curmudgeon Albert Ruesga out of his writing retirement. His latest post on the need for philanthropy to recognize class divides is particularly enlightening. As he puts it: “To introduce and champion class consciousness is to acknowledge that the ‘structures’ we seek to change—if we’re enlightened grantmakers—are often structures put in place to serve the purposes of an economically defined class…So while we might wish to remain class-neutral, the structures that keep people in poverty unfortunately will not. How do we bring the lived experience of the poor and working poor into institutions that, in spite of our best intentions, perpetuate class privilege? How do we incorporate class-talk into nonprofit work in a way that doesn’t elide hundreds of years of racial oppression? I don’t deny these challenges, but I’m convinced that ignoring the effects of class is acting in bad faith. It’s treading water while strong currents continue to carry us and our neighbors further downstream.”

  10. Finally, if you are looking for an actual book to read in the new year, Michiko Kakutani reviews reporter David Sax’s new book The Revenge of Analog which chronicles the rise in popularity of pen, paper, books, records and all things non-digital. Sign me up!

Photo Credit: Sebastien Wiertz

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What Social Change Requires

ConstitutionIt is obvious to most in this country that our political system is quite broken. A gridlocked Congress, a shilling mainstream media, a checked-out electorate, and the list goes on. But last week I saw some hope.

I participated in a really interesting gathering in Baltimore hosted by the William and Flora Hewlett Foundation. As part of their Madison Initiative (a $50 million project to “support and improve the health of representative democracy in the United States”) Hewlett brought together 90 nonprofit and government leaders, consultants, journalists, heads of think tanks, and other foundation leaders to connect and analyze.

It was a fascinating few days. Through conversations and design-thinking sessions we were encouraged to stretch our thinking about solutions to the often depressing state of American government. I met some inspiring people who are creating solutions to our broken political system. (A few have agreed to be interviewed on the blog, so stay tuned.)

I am only tangential to this world of political reform, so for me it was interesting to see how conversations happening here can inform social change more broadly.

A few things occurred to me over the course of the three days about what effective social change requires:

Networks AND Institutions
Networks, loose connections of people and groups, exist outside of our 200+ year-old political institutions, but social change happens when networks organize themselves enough to pressure outdated institutions to adapt. This happened in the civil rights movement, recent global democracy movements, and the state-by-state legalization of gay marriage. But when networks and institutions don’t connect, social change doesn’t happen (like in the Occupy movement). So networks must organize enough to influence institutions, and institutions must open themselves enough to let networks in. Social change requires that the two work in tandem.

Millennials AND Boomers 
Echoing Robert Egger’s guest post this past summer on this blog, both Millennial and Boomer generations have a deep commitment to social change and the critical mass necessary to make it happen. But they would be even more effective at creating social change if they worked together, instead of against each other. Millennials need to recognize that Boomers fought for system change in their day (civil rights, women’s rights) and Boomers need to recognize that Millennials are creating similar kinds of system change, just with new tools and technologies. The two must find connections and collaborate more often. And I think Gen Xers (of which I am one) can play a critical role in translating between the two generations.

East/West/Rural/Urban Geographies
This is a huge country and sometimes that reality gets in the way of change. Red vs. blue, rural vs. urban, Eastern time zone vs. Western time zone, coastal vs. flyover states, there are many ways to slice our country. It amazes me how often people focus on geographic differences instead of common values and goals. But true change comes when we break down those walls and have a conversation based on shared values rather than opposing frames of reference. The only way we move beyond impasse is for each side to listen with a completely open mind (free of assumptions and stereotypes) to the other side. And occasionally leave our comfort zone and meet others where they are.

At the end of the day, political reform is no different than any other social change we seek. To create positive change we must move beyond the dichotomies. We have to think much bigger. Perhaps the answer to our political woes is the same as the answer to our other social challenges, as E.M. Forster put it, “Only connect!…Live in fragments no longer.”

Photo Credit: Wikimedia

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10 Great Social Innovation Reads: July 2014

social innovation readsDespite being the height of summer, July was far from the month to put our brains at rest. The blogosphere created some really great pieces.

A couple of fascinating debates – one about the role of philanthropy in democracy, and one about the value of nonprofit evaluation – were fascinating reads. And I always love a good controversy, so July gladly provided at least two. The much heralded “sharing economy” came under fire and the hype around social impact bonds was called out.

Below are my 10 favorite reads from last month. If you want to see a longer list of great reads, follow me on TwitterFacebookLinkedIn or Google+. And you can see past months’ 10 Great Reads lists here.

  1. There was a really interesting debate on the Markets for Good blog (always a place for thoughtful conversation) between Andrew Means and Patrick Germain about the value of program evaluation and performance measurement in the nonprofit world. Andrew Means kicked it off here and here and Patrick responded here.

  2. I absolutely love it when someone makes you think about something that you took for granted in a whole new way. Conventional wisdom is that the sharing economy is a democratizing development. But Max Holleran, writing on the OpenDemocracy blog, argues that perhaps it is the complete opposite. As he says, “Our concept of what sharing means has gone from The Gift to the paid-for lift…How we assess public goods has also changed dramatically: urban commons have been ceded to private-public management initiatives.”

  3. The Hewlett foundation announced a new $50 million initiative to “strengthen representative democracy in the U.S.” And that announcement inspired a thought-provoking back and forth about the role of philanthropy in democracy among Daniel Stid and Larry Kramer (both from Hewlett) and Maribel Morey (assistant professor of history at Clemson University), via a Stanford Social Innovation Review blog post and the subsequent comments to the post. No matter your politics or your views on philanthropy, it is refreshing to see such an open discussion about a foundation’s efforts.

  4. On a somewhat related note, Amy Schiller argues that we cannot allow philanthropy to be a “workaround” to the “friction of democracy, ” which is necessary for truly solving social problems.

  5. To get more funders to invest in nonprofit organization building we need more data and case studies on the return on investment. Building the case for funder investment in nonprofit technology capacities, Berta Colón, Cynthia Gibson, Michele Lord, and Geraldine Mannion examine recent data on building nonprofits’ digital reach, and the Knight Foundation provides a case study on how National Public Radio (NPR) built their digital skills.

  6. I love New York Times food columnist Mark Bittman for his fabulous recipes and views on food, but recently he’s become somewhat of a food activist, and his article on the the true (social) costs of a burger is eye-opening.

  7. Is there hope for the famously dysfunctional nonprofit board? A new report from Urban Institute suggests we need to raise our expectations of nonprofit boards. Let’s hope!

  8. I know I’ve been including Steven Pressfield in my round ups lately, but this man really knows how to inspire people to fight the demons that face them in order to create whatever they were put on this earth to create. His recent blog series entitled “Why” does just that. I think social changemakers, more than anyone, need this kind of inspiration.

  9. Curt Klotz from the Nonprofits Assistance Fund argues that nonprofits must price their services according to value because “there is no virtue in self-imposed austerity that leads to mediocrity in our programs, and constant turmoil in our finances.” Amen to that!

  10. Writing on the PhilanTopic blog, Laura Callanan pulls back the curtain on some of the hype around social impact bonds and social innovation in general. Instead of falling victim to shiny object syndrom she asks that “we all bring our critical minds – as well as our open hearts – to the job of social change. Let’s celebrate the potential in the new approaches but also integrate them with prior experience and test them with our constituents…Let’s remember that a tool is just a tool.”

What thought-provoking or controversy-inspiring read caught your eye last month?

Photo Credit: Josue Goge

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Catalyzing Nonprofit and Philanthropic Effectiveness: Fay Twersky

Fay TwerskyIn today’s Social Velocity interview, I’m talking with Fay Twersky. Fay, an expert on philanthropy and the nonprofit sector, serves as the Director of the Effective Philanthropy Group at the William and Flora Hewlett Foundation. In that capacity, she oversees five functions including cross-foundation support, evaluation and organizational learning as well as grantmaking in support of organizational effectiveness and a strong philanthropic sector. Prior to Hewlett, Twersky was at the Bill & Melinda Gates Foundation, designing and developing their Impact Planning & Improvement division.

You can read other interviews in the Social Velocity Interview Series here.

Nell: As head of the Effective Philanthropy group at Hewlett you obviously think a lot about how nonprofits and philanthropy can work better together. There is a very real power imbalance between those doing the work (nonprofits) and those funding that work (philanthropists). How can we overcome that power imbalance so that there are fewer hurdles standing in the way of the work?

Fay: If we are being totally honest, I am not sure that we ever fully overcome the power imbalance. But, the first step is, simply to be more honest. Candor and openness can go a long way. One the funder side, if funders are more open and candid about what we can and cannot do with respect to funding, if we clearly communicate about our priorities, strategies, goals, and funding criteria, that will help a lot. If we listen to nonprofits with open ears and keep an open mind, that will help build more productive relationships. If our funding is fair and flexible, and we recognize through our support that nonprofits need overhead to run a high performing organization, our grantees might experience us as more respectful and fair.

On the nonprofit side, I think it is also essential to be more honest. Actually, what I really mean here is to be more realistic – more realistic about expected results, about timeframes and what it takes to run an effective organization. In addition to saving lives, reducing carbon emissions, or improving reading skills, nonprofits also have to pay the rent and buy computers. Be honest with yourselves and your funders about what is required to run a top notch nonprofit. We need to know. We also need to know if we are making the wrong assumptions or ill-conceived decisions.

Nonprofits are often complicit in the funding game of over-promising and under-delivering. It may be that funders have more power to change that expectation, and we should, but nonprofits can also do their part by regularly educating us on the art of the possible.
The truth is, we need each other in order to create the change we seek in the world.

Nell: One of the goals of the Effective Philanthropy group is to improve the overall effectiveness of the philanthropic sector. That is a big undertaking. How do you go about that?

Fay: Not alone!

The philanthropic sector is growing at a tremendous rate. In 1990, there were 32,000 foundations in the United States. Today, there are 115,000. And, that number is likely to continue to grow. And those foundations are dedicated to a huge diversity of needs. The Hewlett Foundation views our philanthropy grantmaking as a highly leveraged way to improve all of philanthropy—so that the many areas of need are funded and supported in smart and sustainable ways.

We have a modest budget for grantmaking to improve the sector, and we pursue two strategies to achieve that goal. Our first strategy focuses on producing and disseminating knowledge about how to do philanthropy well. Our grantees in this portfolio include groups like the Stanford Social Innovation Review, Grantmakers for Effective Organizations and the Foundation Center. We are hosting a convening of our knowledge grantees this month to seek their input into our strategy going forward and any changes we should consider. Our second strategy is brand new and currently in development. One of our primary goals with this new strategy is to pursue grantmaking collectively with other funders. The strategy will likely focus on ways to promote more openness among foundations. More on that later in 2014 as it develops.

Nell: Another aspect of your work is to make grants to nonprofits for organizational effectiveness, or in other words, capacity building. But few foundations recognize the need to invest in stronger, more effective nonprofit organizations. What is Hewlett doing to convince more philanthropists to invest in organizational effectiveness?

Fay: We think it is essential to support nonprofits to be high performing organizations, and not projects for hire. We do this by providing flexible general operating support when we can and also through organizational effectiveness grants – grants that are explicitly targeting improvements to the strategic and operational aspects of an organizations. These are typically smaller grants, but, according to our grantee perception report survey results, they are greatly appreciated by our grantees. A lot of the credit for our program really goes to the Packard Foundation, on whose program ours is modeled.

We regularly consult with colleagues in philanthropy about how we approach our work and sing the praises of our OE grants, but we know that there is still a long way to go among foundations overall. I don’t know the numbers, but I am hopeful that we are seeing a positive trend as there does seem to me to be more interest in supporting organizational capacity. This year, we are conducting our first ever comprehensive evaluation of our organizational effectiveness grantmaking program, and we are committed to widely sharing the results and any resulting refinements to our approach.

Nell: There is a growing push to encourage nonprofits to evaluate their work. But there is a chicken or the egg situation where nonprofits can’t find the funding to create performance management systems, and so they can’t demonstrate the value of their work in order to secure more funding. How do we solve that?

Fay: There is so much I could say about this topic having worked on all sides of this equation–in a nonprofit, as an evaluation consultant and as a funder. But, I will limit myself to a couple of points.

First is funding. Foundations need to provide funding for measurement. Nonprofits must build it in as a line item in every budget. Measurement is not a nice to have. It is a need to have. Just like rent.

Second is mindset. Measurement is not for punishment, but for learning. Funders need to approach it this way too. This is related to your first question, about removing hurdles in the funder/grantee relationship. If funders want to have more honest relationships with our grantees, we have to encourage the sharing of news about disappointing results and be prepared to provide continued support for course correction. Not every time of course.

I have had several different experiences that relate to mindset. One was as a funder with a reluctant nonprofit. This was a situation where I had questions and concerns about a particular program we were funding and suggested to the CEO that they conduct a formative evaluation of the program and that we would fund the full costs of the evaluation. He was reluctant and protective of his program. He in a sense fell in love with the program instead of its purpose. After several conversations, he was still unwilling to engage in an evaluation and given that circumstance, which I experienced as a lack of openness to learn, we stopped funding that program. It is essential for all of us to have the courage to learn and change.

I have had many more wonderful experiences with supporting nonprofits to measure results. The best of these do not just deliver good news. They are evaluations that produce information for nonprofits to learn from, to be challenged by and to catalyze improvement. And, when nonprofits share those lessons with us, we get smarter. Because most of the knowledge out there is within reach of the nonprofit organizations. And, as they say, knowledge is power. Perhaps the secret to this funder grantee relationship is recognizing that true power imbalance should rightly tip in the nonprofit’s favor.

Photo Credit: William and Flora Hewlett Foundation

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