Category Archives: foundations

Whom do you trust to lead community improvement?

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Whom do you trust to lead community improvement?

This question keeps rolling through my head as I’m participating in the Growing Social Impact for a Networked World conference.

It’s not an easy question. It gets to the heart of a person’s values, upbringing, work history, own sense of self-control, and more. And, it’s a tough conversation for a group, whether that group is a philanthropic family or a foundation board.

But I’m convinced it’s an essential question for self-reflection by foundations and philanthropists, especially now as people, communities, and nations struggle to find the best paths out of the recession.

I think when you boil everything down, a foundation or donor ends up with three choices as answers:

  • Citizens – philanthropy that strengthens citizen engagement and leadership and even helps them exercise their voice in and lead community progress. It’s philanthropy that puts its trust in everyday people, consumers, start-up social entrepreneurs, and unincorporated networks.
  • Frontline delivery mechanisms – philanthropy that strengthens nonprofits, schools, and congregations. It’s philanthropy that puts its trust in the professionals who have studied the issues and had experience in delivering effective solutions.
  • Strengthening institutions – philanthropy that strengthens the ability of government agencies or the corporate community to move our communities and nation forward.  I know that most people will hate that I’ve lumped these together.  But I see them both as expressions of supporting the existing aggregations of power (market and elected).  And the philanthropy that puts its trust in them looks similar – support of public policy, public will-building, multi-sector partnerships, etc.

The easy answer is to support all three, and it can be sometimes be smart to do. But “all 3″ is also the weak way out.  It disconnects giving from fundamental core values and beliefs – of the real answer to where you see power* and authority should be placed.

As one example, the community foundation field especially struggles with this question because they try to serve all three audiences simultaneously. Their answers show through how they design their strategic philanthropy and community leadership initiatives. Some answer “We’re about empowering donors and/or neighborhood residents to lead change” (trust the people).  Others answer “We’re about building strong nonprofits and social entrepreneurs through grants and capacity building services” (trust the delivery system).  And others answer “We’re about building community assets for the long run and hiring smart staff to run initiatives” (trust us as the institution to lead change).

As another example, funders in my adopted hometown of Pittsburgh are paying for an assessment of the community development system. Though the essential question above hasn’t been explicitly asked in discussions so far, funders, intermediaries, and government officials are revealing their biases. Some see the community development system at its roots as being about supporting citizen-led change; others as about robust delivery of units, jobs, and saved lives; and others about catalyzing and increasing the investments of government and financial institutions.

So, what’s your answer – where do you place your philanthropic bets?  And, do you have other answers?

 

Caveat:  I’m a white Midwestern guy, child of two generations of entrepreneurs, with an employment history in state government and endowed foundations. Many will say I have no standing or legitimacy to discuss power dynamics. I’m ok with that.

What I Learned About Networks at Summer Camp

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What do funders really want from networks?

I heard one set of honest answers to this question this summer as I wrapped up consulting for the Lumina Foundation for Education.  ”Camp” was actually the session “Funder Perspectives on Investing in Networks” that I had the honor to facilitate for Lumina’s partners and grantees in its KnowHow2 GO initiative.

Our insightful panelists were:  Warren Cook, Co-Founder, Maine Network Partners; Tessa Carmen De Roy, Manager, Rosalinde and Arthur Gilbert Foundation’s College Access and Success Initiative; Thomas Kelly, Associate Director for Evaluation, Annie E. Casey Foundation; Donnell Mersereau, Executive Director at Midwest Community Foundations’ Ventures and Vice President at the Council of Michigan Foundations; and Sheri H. Ranis, Program Director for College Preparation, Lumina Foundation for Education.

My key take-away was this:

The field of networks and supporting networks is evolving, and many donors and foundations aren’t versed in the work or see it as too complicated.  Even foundations that fund networks are still learning the difference between supporting a network setting versus a single-organization, direct service setting.  Ultimately, networks will have to “teach up” to funders and donors – proactively helping them connect network work to their own goals.

Their advice for networks and collaboratives

According to the panelists, networks that are most likely to attract funding have:

  • Genuine and productive relationships amongst members
  • Members that can clearly articulate the benefit of the network to their own work and the collective impact they’re trying to achieve
  • A bias toward action (the clear, interim steps toward longer-term goals)
  • Processes for learning and effectively sharing that learning with funders and other community leaders

Donnell noted that community foundations are particularly interested in a network’s role in increasing civic engagement and making community problem-solving processes more inclusive.

The panel advised that when approaching donors and funders, networks focus first on the ends – the outcomes for people or communities that excite people, even touch their hearts.  Tessa made the analogy that the outcomes are the movie we want to see and the network’s work is the “making of the movie” bonus feature that makes the story great.  That said, Warren and Tom warned that networks be careful to talk about evaluation and results in terms of “contribution” to solving a problem not “attribution” to a solution.  Even the best networks (or funders) can’t control everything in complex systems.

I’ll continue my “network funder camp” experience this fall at the Growing Social Impact in a Networked World conference.  I’ll share more of what I learn then.

What do you think foundations want to see in networks?

Creating Shared Value Between Grantmakers and Grantees

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I just read the Harvard Business Review article “Creating Shared Value” by Michael Porter and Mark Kramer (also here) and highly recommend it.  (Thanks to Paul Shoemaker at Social Venture Partners for the tip.)

The article makes the case for businesses to create shared value – “policies and practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it participates.” In short, reconnect the success of a company with the success of its community in a way that goes beyond charitable giving and social responsibility.  One of their example corporations, Nestle, has even snagged www.creatingsharedvalue.org for its own work.

The article focuses on how businesses and social enterprises are doing this, and touches on how government agencies and nonprofits need to re-think creating shared value with businesses.  Porter and Kramer describe five characteristics of government regulations that encourage companies to pursue shared value.  I think their list also applies to grantmakers and donors as they pursue more strategic and effective philanthropy.  Here are Porter and Kramer’s recommendations with my quick takes:

1. Set clear and measurable social goals

Clear and measurable goals are watchwords for smart philanthropy. My experience is that most donors and foundations can do well on this point without creating complex theories of change, but most could be better at being clear to the public and potential partners.

2. Set performance standards but don’t prescribe the methods (leave the methods to the innovation within companies)

How refreshing is it when a funder focuses on the ends rather than the means, encouraging grantees and community partners to develop solutions based on their own assets and experiences?  I have found this method of giving builds the most durable working relationships with grantees and can provide the most welcoming invitation for other funders and partners to co-invest.

3. Provide phase-in periods for meeting the new standards, allowing the companies time to develop and introduce new processes and products

Again, how refreshing is it when funders give nonprofits time to learn, adapt, and test new ideas?  There’s no question that there are circumstances when a funder may want and need to incentivize quicker action in a nonprofit or a community.  But I’ve found, as Kramer and Porter suggest, that the new standards and ideas will stick longer when nonprofits can adopt them in a timeframe that is consistent with their business cycles.

4. Establish universal measurement and performance-reporting systems and invest in the infrastructure for collecting reliable data

I’ve seen the power of shared measures across a set of nonprofits or even a group of foundations, and I remain a true believer in the idea.  Coming to agreement on those measures and performance systems isn’t easy, but it pays off in terms of evaluation that’s easier for the nonprofits, their donors, and the public to understand.  And Porter and Kramer are right to say that it takes purposeful and proactive investment to ensure the right data is available often enough for continuous improvement.  The results-based accountability process and the software provider Social Solutions offer a couple easy ways to accomplish this idea, and I’m sure there are many others.

5. Develop efficient and timely reporting of results rather than expensive, detailed compliance processes

Again, a focus on the ends rather than the means.  The best funders and nonprofits use these results as a basis for ongoing conversations about what’s working well and what needs changed – conversations that are more productive than long performance contracts and grant reports.  I’d add the idea of “public reporting of results” by both the funder and the nonprofits, encouraging public dialogue (and even action) around issues that impede better results.

What do you think?  Does this set of ideas around creating shared value translate to your idea of effective and meaningful philanthropy?  Would this type of grantmaking be easier for nonprofits too?

The Giving Pledge: Where Do You Stand?

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The world of philanthropy continues to buzz about the Giving Pledge and the growing number of wealthy families who are publicly committing to giving away the majority of their wealth.

The conversation is truly democracy in action.  Americans are gathering together around an idea that inspires them and freely giving of themselves. They’re choosing to express their generosity in ways that make sense to them.  Conversely, other Americans are expressing their right to freedom of speech, including publicly criticizing others’ actions and intentions.

Here’s where I stand, as if it matters to the wealthy donors or anyone else…

I stand with those taking the Pledge and the people who are cheerleading them, believing that over time:

So, I don’t stand with people who are unhappy because the Giving Pledge:

The Giving Pledge is a proactive invitation from the wealthy to others to consider their moral commitment to give, and I don’t think it needs to be anything else.  Even billionaires have the right to give just like you and I do.  We give from our hearts and spiritual callings and rely on friends and instincts more than research.  We sometimes make mistakes along the way and sometimes create legacies that are terrific.  They do too.

We have to trust that over time we’ll all continually grow through our giving.  We’ll learn more about ourselves and the world and learn to ask better questions of ourselves and of nonprofits.  And, we’ll come to a place where we’ve each created our own inspiring intersections of meaningful giving and community results.  Ultimately those paths to learning and meaning are ours to take, not for others to dictate.

Where do you stand on the Giving Pledge?

Creating a Trusted Community Giving Center pt. 4

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Recent conversations and readings have inspired my thinking about a hypothetical Community Giving Center – a physical and virtual network of and for generous people.

What’s a Community Giving Center about?  In my last three posts, it was about the right physical environment, a culture of reciprocity, low-level affiliation, open architecture operations, employing network weavers, and mobilizing resources around resonance.  In addition…

It’s about “meaningful giving,” not “effective giving” – the recent research report, Money for Good, showed that wealthy donors say they care about the effectiveness of nonprofits and their own gifts.  However, few donors do intensive research into effectiveness before they give.  What’s more, donors are incredibly loyal, with 86% of donations going to the same organizations as last year.

This shouldn’t come as a surprise.  People naturally want to be right – we naturally feel we’re smart donors or investors.  It’s called confirmation bias, “a tendency for people to favor information that confirms their preconceptions or hypotheses, independently of whether they are true.”  Behavioral economics and communications research confirms that our emotions and beliefs will outfox facts and rationality every day.  Two recent great reads on this include Network for Good’s Homer Simpson for Nonprofits (doh!) and the Boston Globe’s article, How Facts Backfire.

There will never be universal demand for nonprofit effectiveness ratings, outcomes data, and program logic charts.  (Sorry friends in the evaluation world.)  But what is universal is our search for meaning and for connections to community and something bigger.

Our hypothetical Community Giving Center is ultimately focused on helping people get their generous stuff done, whether that is donating, volunteering, advocating, or investing.  I think this will mean more time helping people define and act on what is meaningful for each of them.  More time helping them connect with others who share their hopes and concerns for the world, and even taking action together.  Questions about impact and effectiveness may naturally flow from the network of generous people and the Center would help them explore options that make sense for them.  But the Center would lose donors’ trust if it tried operating with a culture that “impact-based giving is better than emotion-based giving” (e.g. “we professional staff or long-time donors are smarter than you”).

What if nonprofit CEOs, foundation staff, and philanthropy advisors (including me) and philanthropy critics gave up their addiction to telling donors what to do and how to give? (And, who will create the drugs and 12-step groups necessary to support that process?)  What if a traditional philanthropic institution was truly generous and gave away the concepts of “good giving” and “right solutions to community problems” to generous community members?

Conclusion (for now)

Consultants more experienced than I am say the world of philanthropy is going through big changes.  The Monitor Institute’s What’s Next for Philanthropy and Duke University’s Disrupting Philanthropy are just two of the important current analyses of philanthropic trends and changes.

The world is working in more networked and transparent ways.  Boundaries between private, philanthropic, government, and citizen sectors are blurring.  Individual donors and entrepreneurs have more options to express their generosity, attract others’ generosity, and drive community change.  Existing institutions that work in community philanthropy – United Ways, giving circles, community foundations, churches, youth service initiatives, and others – are facing tough culture changes to survive these changes and more.

My hope is that the hypothetical Community Giving Center I’ve described may offer some clues on new ways for those existing institutions to do business.  At the core, the idea of the Center is about helping people get their generous stuff done, however they define that along the way.  It would attract people through a setting and culture that create a trusted, authentic, fun, and useful experience – one that meets the changing ways the world works and changing options people have to express their generosity.  Done right, I think the result would be increased giving, volunteering, advocating, and socially-conscious investing.

What do you think?  Is the Community Giving Center idea worth pursuing?  Is it even feasible?

Creating a Trusted Community Giving Center pt. 3

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A recent conversation with Bill Traynor and other readings on networks have inspired my thinking about a hypothetical Community Giving Center – a physical and virtual network of and for generous people.  Hopefully the ideas will inspire other community philanthropy groups.

So, what’s a Community Giving Center about?  In my first two posts (here and here), it was about  the right physical environment, the culture of reciprocity, low-level affiliation, and open architecture.  In addition…

It’s about “weaving not managing” – And, it’s about leadership focused on network building over managing or institution building.  Traynor talked about the importance of his staff and other neighborhood leaders being “network weavers.”  Their purpose is to grow their community’s capacity for collective decision-making, problem-solving, and information sharing.  The Networked Weaving blog says that weavers connect people strategically where there’s potential for mutual benefit, help people identify their passions, and serve as a catalyst for self-organizing groups.

I love the idea of people dedicated to growing and connecting others’ philanthropic problem-solving skills.  Many community foundations, giving circles, and donor groups strive for this.  However, I see them often caught up in focusing on the grant transaction process.  After the grants, the donors may understand little more about their individual hopes or how to achieve them not just as donors, but as connected citizens, community leaders, volunteers, and people of faith.

What if your local community foundation hired “network weavers” instead of “program officers” and “donor service officers”?  Or, what if philanthropy network weavers were co-hired by the community foundation, United Way, and local wealth and estate planning advisors? What if their charge was to be a trusted resource to increase community giving, regardless of the outcome for their employer(s) and regardless of their personal or organizational agendas?

It’s about mobilizing resources around resonance – the article “Working Wikily” describes how networks (online and in-person) make it easier to mobilize people and to coordinate resources and action.  In The Networked Nonprofit, Beth Kanter and Allison Fine discuss how nonprofits can work with networks and even “free agents,” passionate givers working outside of organizations.

Bill Traynor talked about how his network-based organization is striving to be more demand-driven, deriving new programs and community agendas from trends in choices the network members make or desires they voice.  Bill uses what he calls “resonance testing,” a process through which his staff members help community residents formulate ideas, test if there’s interest in the idea in the larger network, and then test if there’s willingness to act on the idea.  The process builds authentic buy-in but also creates a low threshold for letting an idea go if there’s no resonance or ongoing purpose.

It’s easy for a nonprofit or grantmaker to set an agenda and then go after other people’s money to accomplish the agenda.  (Score points in philanthropy buzzword bingo by calling it “seeking aligned co-investors to move the needle in a community change agenda”).  However, these agendas only make a lasting different when a broad set of well-connected community stakeholders own them.  Using great stakeholder engagement, as advocated by Grantmakers for Effective Organizations, is a start but isn’t enough.  Truly effective and lasting community improvement will draw from the power of resonance testing and resource mobilization by a network of generous people.

What if community philanthropy groups mobilized community resources based on resonance testing rather than boring needs assessments?  What if they put their own philanthropic resources behind the action of free agents and helped weave those agents together?

I think a great Community Giving Center would be a hub for weaving generous people and helping them test their own ideas for engaging others in community change.  Is this too uncontrollable “power to the people” for you yet?  Maybe, but ultimately it’s about trust and true generosity – more next week!

“Pretty Bad Best Practices” of Nonprofits and Funders

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Kudos to the always-thoughtful Clara Miller for her article, The Four Horsemen of the Nonprofit Financial Apocalypse, in The Nonprofit Quarterly!

Miller, President and CEO of the Nonprofit Finance Fund, offers a compelling take on how nonprofits, and their donors and funders, put themselves in weak financial positions that were exacerbated by the recent economic downturn.  She describes nonprofits’ and funders’ “pretty bad best practices” in assessing and restricting the uses of financial capital.  Those practices – her four horsemen of financial apocalypse - are:  1) too much real estate, 2) too much debt, 3) under-water balance sheets and negative liquidity, and 4) torturous labor economics.

In my previous work at a community foundation, I saw first-hand how the siren songs of real estate ownership and endowment building pulled nonprofits into rocky financial shores (to add to Clara’s metaphors).  Unfortunately, those songs were amplified by a couple wealthy donors and funders who offered sizable endowment gifts to organizations that weren’t as liquid as they should have been.  And, I saw many requests for nonprofit real estate ownership with the false hopes that the nonprofit would be in a better financial position just because it owned instead of rented.

Donors, funders, and nonprofits should keep Clara’s article around even when the economy picks up.  It serves as a continued reminder that unrestricted cash is the surest salvation from financial apocalypse.