Off Hiatus

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I took a hiatus from blogging as I settled into my job as executive director of the Roy A. Hunt Foundation earlier this year.  I continued commenting on the world of philanthropy through on Twitter and LinkedIn.  I’ll continue to use those outlets more frequently but will pick back up on occasional blogs.  My viewpoints on all three accounts continue to be my own and not the official viewpoint of the Hunt family or their foundation.  Thanks for “tuning in,” and as always, I welcome your feedback.

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?

Happy National Philanthropy Day

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It’s National Philanthropy Day today.  Go out and be generous and thank others for their generosity!

And while you’re at it, thank an entrepreneur.  A recent study from Fidelity Charitable Gift Fund showed that, amongst other statistics, “companies led by entrepreneurs allocate more than twice the percentage of their profits to charity than many of America’s largest companies.”

What Donors Want, Part Umpteen

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Hi, my name is Tony Macklin.  I’m a philanthropy geek.  (Hi Tony!)  I just downloaded reports on the motivations and behaviors of donors.  I hadn’t downloaded reports for three weeks, but, I felt weak and couldn’t help myself.

From the Nonprofit Quarterly, What Do Donors Want? – Philanthropic advisors William Dietel and Cynthia Gibson caution against an uninhibited “march to metrics” in the world of philanthropy.  They join The Philanthropic Initiative’s Peter Karoff and other in arguing for keeping a balance of art and science in giving by donors and foundations.  They also cite an upcoming book by Princeton’s Danny Oppenheimer that summarizes research into giving behavior:

“no matter what objective information is available, the large majority of donors will give as a result of emotional or relational factors.”

I’ll probably even pick up Oppenheimer’s book, though I’ll probably need the new book Proofiness to make sure I understand the data…

From the National Center for Family Philanthropy, The Power to Produce Wonders:  The Value of Family in Philanthropy – NCFP interviewed 300 family philanthropy leaders to learn more about how giving adds value to their lives, how their personal participation adds value to the giving process and its results, and the value family philanthropy provides to America’s democracy.  Families cited family giving as helping them, among other things, express their passions, continue their entrepreneurial spirit, and provide a means of sustaining values and legacy.  The hope of the family having a specific measurable, data-driven impact doesn’t appear on the list, though I suspect that could have more to do with the line of questioning rather than a lack of any interest.

And, from Russ Reid, Heart of the Donor – The firm’s telephone sample of 2000+ adults confirmed trends in giving by other studies.  It also re-affirmed that donors use online research to check up on nonprofits, but human factors overwhelmingly keep a donor coming back to give again:  the organization’s fit with the donor’s interests (e.g. dance or dogs or dancing dogs) and the organization’s trustworthiness and integrity.

Maybe it’s time to set up a national referendum on the donor motivation parties, allowing the “philanthropy is art” vs. “philanthropy is science” parties to argue their cases in heated debates, high-paid ads, and shadowy viral videos.  Those of us “it’s both” moderates – as in today’s electoral politics – probably need not apply…

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?