I recently got a real taste of what this means as we looked at the social sector landscape in India.

As technology innovators, we are naturally excited by new ideas and, in India, my team was pushing for ground-breaking innovation in health care delivery. We wanted to integrate a new range of patient-centric home medical devices for monitoring and diagnosis using a hosted cloud-based service (built over a connected infrastructure), and to establish a centralized service for remote management. It was a rude shock to learn that while we were advocating the use of the latest cloud, M2M, and mobile technologies, the existing system had not yet applied even two-decade-old basic computing technologies. Many of the ongoing health care programs we observed still used hand-filled paper forms for data-entry and tracking. Within one organization, which ran a pre- and post-natal assessment program, it was open knowledge that data entered by community health workers was rarely monitored, compiled, or acted on.

No wonder it was not easy to measure the success or impact of the program, or to plan for improvements. Timing, resources, effort, and costs were far from optimal, and so much could change—both in quality and effectiveness—through better management of technology we already have available, such as mobile, real-time data entry applications connected to a central server or applications that extract data from central databases to create reports and dashboards.

In contrast, we also came across smaller initiatives that were using “the latest” technologies, including Mobile Alliance for Maternal Action (MAMA), which provides low-income new and expectant mothers in India, South Africa, and Bangladesh with vital health information via mobile phones using SMS and voicemail.

While immensely useful for MAMA participants, technologies like these are insufficient to radically impact the landscape. Technology is still in the hands of a limited few, and effort is needed to broaden the reach.

We are at an interesting stage of social evolution and technology maturity, and it’s time to step back and re-consider our priorities. While new technologies continue to surprise us with their vision and possibility, there is a great deal of untapped potential in consistently applying existing technologies to support, and in fact, direct social change.

Our focus needs to move away from technology innovation to technology application. We should look for solutions—tested and proven in other business sectors like finance, travel, retail, etc.—to build innovative applications for the social sector. This approach will save us from the overhead costs of introducing new technology, as well as temper the complexity and risk. However, this still requires a new outlook to service delivery and innovative business processes; more specifically, it requires a focused effort to manage and direct technology in areas that lead to effective, widespread social change.

The first step is to define a common framework for technology integration, and to apply that uniformly and consistently across all social initiatives. We should keep in mind that technology can emerge as a tool for social development only if it helps to achieve five goals for any social program—these parameters can be used to to gauge the readiness, relevance, and impact potential of new initiatives.

1. Extend reach. Access should extend beyond a limited few to millions through improved and diversified access technologies—for example, reach low-income users who have low-end feature phones with SMS and simple voice messaging, and reach smartphone users with existing apps.

2. Improve services. This can be done by driving new service delivery models that take advantage of geographical and resource gaps. For example, cloud and hosted services can deliver expertise and information to remote regions, providing accurate and otherwise unavailable diagnosis and treatment in health care.

3. Facilitate adoption. Build on convenience, and make it easier and more fun for users to employ technology anytime, anywhere; introduce easy-to-use mobile applications, one-click user interfaces, and other simply designed tools.

4. Deliver relevance. Provide targeted services that tailor to the specific needs of each group. For example, a service to remotely monitor the physiological symptoms for post-operative care reduces health care costs significantly while improving patient comfort and experience. (Note that a service like this requires an integrated arrangement between the patient and the service provider, where the needs and pain-points are well understood on both sides.)

5. Reduce cost. Introduce efficient, optimized processes. For example, use of digital forms  and implementation of real-time data mining and analytic applications can ensure timely action on data and improve the overall return on investment. Use of technology can facilitate automation and reduce overheads.

Internet communication is driving the creation of a connected society, and the growing reach of the mobile phone gives us the opportunity to integrate larger populations into our global, connected society. Together, Internet and mobile provide a platform that has the potential to drive rapid social change unlike any other in history. We can achieve far more than we have by using these technologies as an infrastrcuture to transform education, health care, energy, agriculture, and the environment.

A closing example: In a country like India, the biggest challenges to education are making skilled teachers available in remote areas, and addressing issues around geographical diversity, proximity, and access. Right now, no one is looking at creating a new education delivery channel to facilate virtual classrooms and long-distance learning—that’s despite a government initiative to put Aakash tablets (government-sponsored $50 tablets) into the hands of every one of India’s 220 million school and college students.

It is critical to ensure that we take full advantage of current technologies. It is time for us to recognize that it is in our hands to manage and make the most of existing technology to drive effective, widespread change. Simple ideas can drive local, regional, national, or even global impact on social issues.

The Tooth Fairy and Santa Claus are walking down the street and see a $20 bill. Who reaches down to pick it up? The answer: Don’t be silly; there is no such thing as a $20 bill lying on the sidewalk.

What does this have to do with development? In the standard model of economics, firms generally work to maximize their profits—they adjust their pricing, enter new markets, access credit, hire expert advice as needed, and pick up all figuratively available $20 bills. 

Can firms grow without any infusion of financial capital and without any change to laws, underlying economic conditions, regulations, or export opportunities? If they are doing everything they can to maximize profits, then perhaps not.

Policies, both big ambitious and grassroots ones, often try to help firms grow. The microfinance community, for example, focuses on microenterprises, which are typically one or zero employee “firms.” Many believe that the key to increasing jobs lies with small and medium enterprises, or even larger firms. Others argue that firms are likely already operating at their optima, given their financial and legal constraints, so free money exists only through structural changes—in legal institutions, financing, export abilities, etc.

Two recent randomized trials by Innovations for Poverty Action in Ghana  (coauthored by Dean Karlan, Ryan Knight, and Chris Udry) and in Mexico (coauthored by Miriam Bruhn, Dean Karlan, and Antoinette Schoar) tested whether consulting services can help enterprises grow. In other words, with nothing more than advice, can small firms or microenterprises increase their profits? Or are they already optimizing, given their resources?

The answer is likely, “It depends.” But depends on what?

We’d like to know what you expect. First, let us tell you a bit more about the settings. 

In Accra, Ghana, 160 urban tailors and seamstresses with an average of 0 to 1 employees were randomly selected to be part of the study. A subset of the sample was chosen to receive customized consulting work from Ernst & Young. The consulting began with lessons on the importance of record keeping, then used the new records to help the tailors calculate their profit margin on each item they sew, and taught them how to calculate a monthly income statement. Lessons on customer service and managing employees were discussed throughout. Each available tailor was visited 1 to 4 times per month, with each visit lasting 30 minutes to 1 hour. To gain an understanding of the interaction between management experience and credit constraints, some of these firms also were given a one-time cash grant of $160—more than 80 percent of the average firm’s monthly revenues. The remaining tailors were given only the cash grant or nothing at all. The study thus attempted to test three distinct theories about what impedes the growth of small firms: Is it a lack of management skills, an inability to deploy these skills adequately, or simply credit constraints?

The study design in Mexico advertised for subsidized consulting services to be provided to micro-, small, and medium enterprises in a variety of sectors. A random subset of the firms that replied were chosen to be matched with a local consulting firm that advised the firms on a variety of business practices, from better record-keeping to marketing. On average, enterprises had 14 employees, and met with their consultants once a week for four hours over a one-year period. The enterprise owner and consulting firm decided jointly on the focus and scope of the consulting services. The study thus jointly tested theories of microenterprise development along two closely related dimensions: whether a lack of management skill is a limiting factor in the growth of enterprises (a bit larger than those in Ghana); and, in addition, whether this knowledge can be conveyed via the provision of short-term consulting services.

In the summer issue of SSIR, we will discuss the results of these two studies in more detail. But here, we’d like YOU to predict the results. We are doing this because people often have preconceptions about solving poverty issues, and rigorous evaluations often challenge conventional wisdom. It’s always easy to say, “I told you so” when there is no clear record of what the predictions were; ideally, people could register their predictions in advance.

With this experiment, we also are taking a baby step toward a more ambitious idea—to have a market in predicting the results of randomized trials. Such a market would serve two purposes. First, it would allow stakeholders to stake their claim (pun intended) on their predictions and be held to acclaim when they are right or to have their opinions challenged when they are wrong. Second, such a market could help donors, practitioners, and policymakers make decisions about poverty programs, by engaging the market’s collective wisdom. (Think www.intrade.com, but for results of social impact interventions.)

So here goes. To make this survey tractable, we have lumped together outcomes and asked for broad predictions. Please vote which of the four possibilities is the outcome of the Ghana and Mexico studies:

Among those who provide the correct answers, we will randomly (of course) choose two winners: winner #1 will receive a free copy of Dean’s book with Jacob Appel, More Than Good Intentions, and winner #2 will receive a free, one-year digital subscription to the Stanford Social Innovation Review.

What’s New?

Home Sweet Home. The new homepage features refreshed navigation bars, a marquee showcasing the latest and greatest SSIR content, and in-line browsing by content type. Just click the forward or back arrows to quickly flip through articles, blog posts, podcasts, or webinars.

More ways to see what your peers are reading. See the most read articles and blog posts (a tabbed sidebar is on every page), and see who is sharing what on Facebook from any article page.

Comment indicators. Instantly see where discussions are happening on the site via the new comment counters next to each article—then join the discussion yourself. Add a photo avatar to your comments by creating one in Gravitar—just click on the link in the comment box at the end of any article.

Blog channels. By popular demand, our daily blog will begin featuring special point-counterpoint discussions (our first argues the merits of philanthrocapitalism), and journal-style, serial posts about developing social entrepreneur and research projects (the latest is an ongoing report on the Philanthropy, Policy, and Technology Project, which is looking at the use of private resources for public good.). Other channels offer content tailored to specific interests, including Practical Advice for organization leaders; analysis of new research data (Research Notes); and Starting Up for students and others new to social innovation (see the menu on the right of blog pages for all channels).

Better information. Above each headline, you will now see text that describes the main topic of the content (impact investing, philanthropy, technology and design, etc.). You can click on this text to see all content in that category. (You can also click any author name to call up their bio.)

Issue pages. Browse articles from the print magazine by issue or by section (see the menu on the right-hand side of the page).

Related stories. Easily find more of what you're looking for via the new in-line related stories browsers at the end of any blog post or article.

Browse books by topic (see menu on right of page). Also, coming soon: excerpts from books that SSIR does not review.

Restricted content. Articles with key icons next to the title—about 80 percent of them—are available only to subscribers. If you don’t yet subscribe, the beginning of the New Year is a good time to do so.

Invitation

We invite you to browse, read, share, comment, explore, and enjoy the new website. SSIR aims to inform and inspire leaders of social change—you—and we sincerely welcome your feedback, recommendations for further improvements, and general reactions. Feel free to send feedback by email or in the blog comments here. Thank you for being a part of SSIR’s social innovation community.

Too often social entrepreneur organizations adopt a hero culture, where we take advantage of each other in pursuit of our great cause. I work equally with corporate and nonprofit organizations, and I’ve been stunned by the fact that nonprofit cultures are usually more toxic and unjust than my for-profit clients.

During strategic planning with these nonprofits, I’ll ask, “What’s the biggest barrier to your success?” More times than not they respond, “Our organization.”

The unspoken, but very clear social entrepreneur narrative goes like this: “Because we are good and our mission is noble, I can ask you to work long hours, pay you badly, and ask you to sacrifice more for the cause. So suck it up.”

Through these actions the nonprofit sector is saying is: “We need to be unjust to bring more justice into the world.”

Many young people who are growing out of their post college years at a nonprofit aren’t just disappointed at their experience with social change—they’re bitter. It’s no wonder that more and more of them are telling me they’d prefer to find for-profit social entrepreneur companies than to pursue work at nonprofits.

While more and more social sector organizations are using professional coaches to develop their talent, few invest in the hard work to develop a just organizational culture. But until they invest in developing talent in conjunction with improving the organization, the results will be disappointing.

Social entrepreneurs, who pride themselves on their reputation of being champions for justice, have a difficult time admitting that their own organization is unjust. And it’s rarely in anyone’s interest to call them on it.

But there are nonthreatening ways to do this. The Leadership Circle recently developed an amazing assessment tool. Its Leadership Circle Cultural Survey offers an “MRI of leadership culture,” and I would argue that it is one of the best tools to gauge the health of an organization. Though it is primarily corporations that use it, it can provide a powerful tool for the social entrepreneur sector as well. Basically, it graphs where the organization’s leadership thinks the organization’s culture is, compared to where employees and board members think it is. The gap presents a nonjudgmental starting point for an organizational strategy plan.

It’s next to impossible to make the world a more just place while your own world or organization is unjust. All true world-changing organizations must have a written strategic plan that supports both personal leadership development and improvement to the organization’s leadership culture.

The social entrepreneur sector must better itself before it can better the world.

“If baseball scouts’ intuitions lead to outcomes, use them, and if statistics produce greater success, as Moneyball portrays, then use them, and if together they provide better results, mix them,” he astutely observed.

Of course, while a baseball game can involve complex strategies, it is a more contained system than the nonprofit arena. It is governed by rules, which often fall short when tackling such pervasive problems as poverty. As Bill Veek once said, “Baseball is almost the only orderly thing in a very disorderly world—if you get three strikes, even the best lawyer can’t get you off.” It is easier to quantify a pitcher’s accomplishments than the spirituality stimulated by a religious organization, or the joy and healing by an arts group.

Nevertheless, sabermetrics offers constructive, as well as cautionary, lessons for foundations.

Proponents have found hidden value by better forecasting player performance. Historically, scouts “knew” that the best first basemen were tall left-handers, yet through rigorous quantitative analysis, the A’s discovered that body type didn’t matter, so they acquired some fine—and affordable—ones who were stout and right-handed. Moreover, on-base percentage, a statistic that was ignored, proved to be more predictive than traditional indicators such as batting average or stolen bases. Many donors, likewise, have determined that for calculating nonprofit effectiveness, programmatic outcomes are superior to administrative cost ratios and program outputs. Through enhanced perfomance assessment, they have realized that some legacy nonprofits are over-valued, while other innovative and evidence-based programs are underrated. 

Still, most foundations, especially smaller ones, underutilize strategy and performance measurement, diminishing their potential. Relying on untested “conventional wisdom,” they risk underestimating certain organizations by neglecting significant metrics such as program-related results per cost and the extent of their shared leadership, network connectedness, and reflective learning. The Hill-Snowdon Foundation, once a “charity-check-writing-around-a-family-kitchen-table” operation, has increased impact by strategically focusing its few million dollars of annual funding and using more data to inform decisions.

Yet relying too much on metrics brings its own risks, as baseball amply illustrates. Franchises that have discounted team chemistry, clubhouse leadership, and player conditioning have paid a price. While Moneyball techniques helped the Boston Red Sox win championships in 2004 and 2007, they collapsed this season—and devastated my four-generation Red Sox fan family—as a result of disjointed teamwork, collective stress, and other unpredictable circumstances.

In philanthropy, an approach that is overly rational, or too oriented around “command and control,” numbers and accountability can similarly backfire when inclusivity, responsiveness, and improvisation are overlooked. While particular nonprofits can benefit from control group studies, for example, most gain more from an iterative R&D approach to evaluation entailing real-time learning about cause-and-effect patterns and rapid program adaptation.

Moneyball should not convince funders to go overboard and let algorithms, logic models, and cost-benefit and ROI analysis dominate. Like baseball managers, they must begin by selecting players with the greatest potential. The craft of grantmaking is crucial: Funders should authentically cultivate nonprofit partnerships, collaborate on agendas and strategies, and allow for experimentation. They need to share control and work organically within fluid boundaries.

Just as baseball is both an art and a science, so can philanthropy benefit by deliberately tapping the dynamic tension between the humanistic and technocratic. A case in point is the Novo Foundation, which makes approximately $55 million in grants annually to empower girls and women. Foundation President Jennifer Buffett says that her father-in-law, Warren Buffett, advised her and her husband to focus their funding, take risks, be patient, and assess their impact. “In a field that works to build and support human capacities and change entire systems, it is not a good idea to fall into the trap of relying exclusively on metrics or a technocratic approach,” she comments. “We work in a very thoughtful way to equalize power relationships, build expertise on the ground, and listen and nurture…balancing and considering the head and the heart. That doesn’t mean we are not interested in sound structures, evaluation, and solid results. But, again, to us, solutions should always have a human being, a human voice, at the center.”

Neither philanthropy nor baseball can afford to disregard the varied ways to create value. Moneyball advocates would be well-served to view empirical data as the beginning, not the end, and heed intangibles. And baseball traditionalists should appreciate sabermetrics’ insights more.

Correspondingly, some technocratic philanthropies might benefit by not being as directive and rigid with grantees, “owning” the strategy less, drawing on values and intuition more, and looking hard for any blind spots causing over-confidence. And certain humanistic grantmakers could profit by providing further direction to grantees and holding them more accountable for outcomes. Phil Buchanan, president of the Center for Effective Philanthropy, wisely discerns that funders “need both assessment and morality” and “are morally obliged to seek to know how we are doing and what we can improve.”

Fixed formulas for permanent solutions are unrealistic because the real world is not static. The way forward is intentionally intertwining the objective and subjective while diligently measuring shifting variables, creatively exploring how they influence outcomes and making meaning, and continually adapting strategies, tapping the wisdom of diverse stakeholders at every step. This emergent journey matters far more than the metrics. Whether you are striving to win the World Series or scale social innovation, you need to cultivate a symbiotic and vibrant interplay of logic and instinct, internal expertise and outside perspective. You need to follow the linear path along with the serendipitous one.

Kiva is an organization that I’ve held up in the past as really understanding how to tell an authentic story that “sticks” (in the vocabulary of the must-read book Made to Stick: Why Some Ideas Survive and Others Die). The point of the book is that a good story is true and told in such a way that it spreads. Too often I worry that the effective philanthropy movement is convinced that if it can just find the “truth” about what works, the rest will take care of itself. But I don’t think that’s enough. We need to discover the “truth” about what works and learn how to tell the story of that “truth” in a way that spreads.

Here is a new video by Kiva. The video presents data about the increasing level of microfinance loans made by the organization over time. But this ain’t no Excel chart…

Intercontinental Ballistic Microfinance from Kiva on Vimeo.

Wow.

This data is just as “true” as a simple chart like the one below (which actual does represent Kiva’s loan growth from early 2006 through late 2007).

In the book Made to Stick, the authors talk about how a group of food scientists spent a long time telling people about how much fat was in movie popcorn. But it wasn’t until they figured out how to tell the story of how fattening movie popcorn was for you—by showing and relating it to a table top covered with bacon, eggs and cake—that people started paying attention.

First, we need to figure out what works. Then we need to figure how to communicate the story about what works in a way that drives people to action. Too often, “effective philanthropy” is obsessed with the first step and ignores the second. Too often, successful fundraising is done with the second step in mind while the first is ignored.

What we need is storytelling for impact that drives people to take action in the service of programs that work.

As a leader of one of the largest capacity-building organizations in the country, I want to let you in on a little secret. You can ignore nearly all these findings and best practices.

Nonprofit consultants and the industry’s media are largely to blame for this proliferation of noise. It is not due to bad intentions. It is simply a natural outgrowth of specialization, survival and marketing.

Consultants become specialists (in social media, strategy, governance, and so on)—and they need clients to survive. Unfortunately, some turn to the tried and true marketing formula of: think up a potential “next big thing,” tell a few success stories, share a few supporting trends about adoption, and make the case that if you don’t keep up with the Jones’s and hire them, your nonprofit will get left behind. The media eats it up, the consultant gets speaking gigs at conferences, and pretty soon their practice or idea or approach is accepted as fact. But it isn’t.

Our sector wastes an insane amount of time implementing best practices that have painfully low—if not negative—return on investment (ROI).

Here are five examples:
1) Volunteers. Recruiting and managing volunteers generally isn’t worthwhile unless you use at least 50 per year, they do at least 50 hours of service each (or fewer volunteers and more hours each), and you invest in volunteer management systems. Short of that, it’s almost certainly a waste of time.

2) Websites. Most nonprofits (the small neighborhood ones) would likely be fine with just a Facebook page. A template site would do the trick for slightly larger group. Only 25 percent of nonprofits need customized web design.

3) Board. There is a tremendously high fixed cost to training your board to facilitate donations (in kind or cash). If your board can’t generate a large part of your budget (say, 20 percent), you are likely to find them getting in the way of fundraising success and eating up senior staff time (and increasing burn out). If that’s the case, your organization would likely see more success with a smaller board focused solely on audits and the legal requirements of governance.

4) Social Media. Does it drive your advocacy, fundraising, or program success? It does for likely less than 2 percent of nonprofits. Everyone else is wasting a ton of time and energy on it. Much like my local car wash that urges me to “like” it on Facebook.

5) Strategic planning. You need a strategic plan, but for most organizations it can be a lot lighter than most MBAs want to admit. It doesn’t need to be perfect and frequently should be more of a living document.

My bottom line advice is that you should only invest in things you need to achieve your goals and be very careful of anything that you should do. If you are not positive which category an investment falls into, don’t ask a consultant. Ask your peers about their experience.

Farfetched? Maybe not. We’ve all been to a fund-raising dinner where the executive director wraps up his speech by boldly saying, “Our mission is to put ourselves out of business!” The emotional audience jumps up and applauds. The leader basks in the praise. But what if a business owner really did that—intentionally?

In his book The 7 Habits of Highly Successfully People, Stephen Covey says to “plan with the end in mind.” When I trained as a FranklinCovey coach, I learned an exercise that carried the point: We all had to write about our own funerals: Who was there? What was said? It sounds morbid to some, but by clearly envisioning how we see the end of our life, we can become more intention-driven in the present. The same could be said of world-changing leaders.

When social entrepreneurs came on the scene in a big way in the ’90s, they were reformers not institutions. They pledged to lessons of the business world to address injustice and change systems. Ironically, the part of corporations they’ve most imitated is the desire to build an organization and keep it alive at all costs.

Businesses are built to last; social entrepreneur efforts should not be—they should shed light on necessary reforms, offer solutions, and change systems.

Social entrepreneurs’ priorities typically shift over time. When they begin, the priorities often look like this:

1. Create awareness of injustice
2. Create a model that remedies injustice
3. Raise the funds to fund the program
4. Build the talent to implement the model

Over time, the mission creeps away from tackling the injustice to institutionalizing the model the company created. The new priorities:

1. Raise money to keep the program going
2. Hire staff members who can raise money
3. Keep the program going sufficiently to raise money

Ultimately, many nonprofits exist purely to fund-raise. The world-changing model has become like the set on an old movie—it’s just propped up to put on a show. The commitment shifts from changing systems to paying the bills. All things related to fund-raising get elevated, while program concerns and changing policy fall by the wayside.

Imagine what would happen if social entrepreneurs announced on their organization’s launch day, “We will increase literacy in this city by 5 percent over the next 10 years. We’ll succeed or fail with our reforms, but either way we’ll shut down in year 10.” There could be four big benefits:

1. Donors would be more likely to invest funds, because they know there’s an end game. 
2. Social entrepreneurs would stay focused on long-term strategic systems change.
3. Funding for the next generation of social entrepreneurs would be freed up when their older, sister organizations shut down.
4. When organizations did shut their doors, we could celebrate their great accomplishments and disruptions instead of shaking our heads in sadness as we often do now.

Keeping the focus on the mission—not the institution—may not be as hard as it sounds. Michigan Corps, founded by Anuja and Rishi Jaitly, launched as a nonprofit in 2010 with a seed grant by Eric Schmidt, the former CEO of Google.

Redefining social entrepreneurship, they announced their mission as purposely bringing local and global Michigander’s together to change their home state. From there, the Jaitlys intentionally moved out of their leadership roles and into advisory roles—they moved to the organization’s board after year one. 

They saw results quickly. Last spring, they were heralded by former President Bill Clinton at his Global Initiative Conference for fostering a first-of-its-kind connection between Michigan social entrepreneurs and Kiva, the world-famous micro lender. The organization has also set in motion countless instances of leaders collaborating in new ways.

When I asked them how they see Michigan Corps in existence, they said: “We built the organization in response to unlocked potential among pro-Michigan leaders everywhere; as the engagement of Michiganders evolves, our organizational role must necessarily shift too. We need to keep our eyes on the mission and off the perpetuation of one entity.”

By creating an organic organization that rises up to meet challenges and goes away after it fosters connections, the Jaitlys are offering a new way for social entrepreneurs to address issues.

Maybe social entrepreneurs don’t need to announce on day one when they plan to shut down. But the sector needs to shift the definition of success from those organizations that survive to those that actually achieve their missions.

So the next time you hear a social entrepreneur say an organization’s mission is to put itself out of business, ask the obvious question: “When?”

For decades, the main pressure facing networks was to be in more places and serve more people. Now, there is a different kind of pressure: to get better. Networks with multiple sites are increasingly expected to provide donors and supporters with a higher level of evidence that their work is effective and delivered consistently across the board. While an “outcomes” orientation isn’t new, its effect on the sector has been magnified, in part because of the difficult economy.

In our work, we have seen several networks take promising steps to deliver measurably better results in achieving their missions. Central offices are working collaboratively with affiliates to improve the way in which their network’s high-level strategy translates into action across the entire organization. They’re figuring out where their best work is being done, finding ways to become more effective, and learning how to ensure that all affiliates benefit from the experiences and know-how of their peers.

Here are five promising elements that networks are using to raise the bar:

Use the network’s unified strategy to drive decision-making. Although network members operate in distinct communities—serving populations or causes that may vary by geography—consensus around a common strategy keeps each site moving in the same direction. The Boys and Girls Clubs of America, for example, identifies key performance indicators (such as academic success measures and frequency of visits) that apply to all clubs, regardless of size, programming, and population characteristics. These measures help the organization assess individual clubs, identify the things that individual affiliates need to do to improve their results, and show where one club might benefit from the experiences of another.

Create a common language by defining the dimensions of effectiveness. When affiliates share an understanding of what high performance looks like, it becomes easier to identify reliable indicators of effectiveness. Networks should ask themselves: What information will allow us to set clear expectations and compare results? What will help us see how all affiliates are performing against their common strategic goal and understand why some affiliates may be achieving more than others? What support is needed to transform the effectiveness of the individual organizations and the network itself?

Create paths for affiliates to improve. No basketball coach would ever tell a player to “just play more like Michael Jordan.” Professional athletes hone their skills by progressing through a series of developmental milestones. The same is true with network affiliates trying to become more effective. Once the networks we studied have developed a clear sense of the dimensions that indicate high performance, they have then shifted their focus to defining clear, intermediate developmental stages on the way to reaching those goals.

Diagnose where the network is today and uncover pockets of strength. Having figured out the developmental stages that characterize an affiliate’s progress, these networks have moved to diagnose their current state, giving themselves a baseline against which to measure progress. They ask: Where do affiliates fall on the developmental continuum? Are there pockets of strength, or weakness? How might the entire network strengthen performance if affiliates could improve in one key area?

Consider the experience of the National Guard Youth Challenge Program (ChalleNGe), which offers a quasi-military environment for teens who have dropped out of secondary school, with the aim of helping them become productive citizens. In 2010, ChalleNGe identified key dimensions of program effectiveness and assessed affiliate performance against those dimensions. If all affiliates could match the performance of the top quartile, then 2,700 more young people would graduate from the residential program each year—a 35 percent increase in impact—without needing to add new locations.

Capture knowledge that matters: After completing the tough task of assessment, networks face the challenge of leveraging affiliate knowledge to improve results across the board. This means figuring out what to do first and how affiliates can best learn from their colleagues throughout the network. Especially important may be the use of a self-evaluation tool by which affiliates can track performance indicators, understand their strengths and weakness relative to other network members, and tailor performance improvement strategies to those strengths and weaknesses.

We have seen a growing number of networks embark on a journey to drive impact in their work. A new article, “Growing Network Impact: How Nonprofit Networks are Raising the Bar on Results” shows how the work of six networks illustrates these practices. Please share your thoughts, ideas, and stories.

Alan Tuck, a partner in the Boston office of the Bridgespan Group, leads Bridgespan’s work with networks and is the former head of the Boston and New York offices. In addition to his work at Bridgespan, he serves on the Executive committee of the Board of Directors of the YMCA of Greater Boston.

Mandy Taft-Pearman is a partner in Bridgespan’s Boston office and lead the work with environmental networks. Prior to joining Bridgespan, Mandy worked for the National Safe Kids Campaign, a national network focused on children’s public health.

The Sea Change-Lodestar Fund‘s mission is to facilitate and fund sensible collaborations among nonprofit organizations. It is prepared to help cover a portion off the one-time costs associated with nonprofit mergers and collaborations. It makes two main types of grants:

• Exploratory grants (generally $25,000 or less) to explore and evaluate a potential collaboration
• Implementation grants (up to $250,000) to cover a portion of the one-time costs associated with implementing a collaboration

MacIntosh explained: “Implementation grants are always made alongside funders of the collaborating organizations, often specialized in sector or from the local geography where the merger or collaboration is happening. Our fund believes in having a high engagement level with the leadership of the collaborating nonprofits, quick turnaround, and a thorough evaluation and approval process.”

When I asked MacIntosh why Sea Change was collaborating with the Lodestar Foundation on this fund, he replied, “We each bring different things to the table. Lodestar is unique amongst foundations in its focus on collaboration. We were thrilled when they approached Sea Change about working together, and put the issue of nonprofit mergers and collaboration on our radar screen. The team at Sea Change has deep financial and transactional experience in both the nonprofit and for-profit worlds, so this was a very natural step for us to take in our effort to help nonprofits have more impact while also seeking opportunities to make leveraged grants. Sea Change does much of the front-end work, the analysis, the site visits, and speaking to the leadership. We have raised some outside funding for this work, though Lodestar remains the biggest funder and Sea Change the second biggest.”

But I wondered how the fund defines “sensible collaboration.” MacIntosh explained, “We define collaboration as when two or more nonprofits combine some or all of their important activities in a formal, long-term, or permanent way. It can take many different forms, including mergers, acquisitions, and various forms of alliances and partnerships. A sensible collaboration is one that has the potential to increase the efficiency, effectiveness, or sustainability with which they pursue their missions. We want to help organizations that have gotten to the point of exploring something or consummating a collaboration, to do it.”

The really nice thing about this fund is that it is set-up to fund what it calls the “unavoidable but uninspiring” costs of collaboration, such as IT integration, re-branding, severance costs, and lease-breaking—costs that many funders would find an anathema. The fund is not a passive donor, however; it gets intimately involved in some of the transactions when it feels it can add value as an outside party. If the fund feels it cannot add any value it is less likely to fund the transaction. Guidelines state: “Our due diligence process is intensive…”—so be sure you want a partner if you approach the fund for support.

And in this age of focus on cost cutting and efficiencies in nonprofit mergers and collaborations, MacIntosh had this to say: “The whole question of cost-savings is more nuanced than many people believe. In our experience, saving money is neither necessary nor sufficient motivation for collaboration. Often the level of potential cost savings wouldn’t be enough to justify the collaboration, but it’s often enough to put the transaction costs in a healthy context. The ability to save money doesn’t mean you actually save it, but instead you reallocate your resources to the program side. After all, the goal is not to reduce the budget, but to produce great contemporary dance, educate more children, etc.”

The Sea Change-Lodestar Fund for Nonprofit Collaboration, based in New York City, takes proposals on a continuous basis from across the country. It’s great to see new, creative funding opportunities like this one for nonprofit mergers and collaborations.