Stanford Social Innovation Review

Is Philanthropy Going Open Source?

Several years ago, I wrote a book chapter about open source philanthropy. It is in The World We Want, edited by Peter Karoff and Jane Maddox and includes an interview with me called, “Open Sesame: Networks of Cooperation and Open Source Solutions.”

It presented seven building blocks for bringing open source principles to philanthropy.

These seven building blocks of open philanthropy are:

1. Facilitate adaptation; don’t hinder it
2. Design for interoperability; local specificity will follow
3. Build for the poorest
4. Assume upward adaptability
5. Creativity and control will happen locally
6. Diversity is essential
7. Complex problems require hybrid solutions

And more recently I’ve been thinking about public ideas, crowdsourcing innovation through Kluster or Social Innovation Camp, and now the folks at Social Edge are onto the idea - read this discussion on open source social entrepreneurship. If nothing else, the basic premises of seeking diverse input, trying some design methodologies such as rapid prototyping, and drawing from multiple disciplines are strategic approaches to solving social problems that are starting to gain some traction.

These concepts are all exciting, and they also raise some questions for philanthropy. Where are the lines between public and private when it comes to ideas for the public good? Can or should someone be able to own a policy innovation? Protect a service delivery process? Are all socially positive ideas public? How will new entities like L3Cs or B corporations re-mix the assumptions about ideas and innovation as proprietary sources of business proposition - or are they public goods?

What are the best ways to encourage creative thinking and bring the ideas to action? Is social entrepreneurship better at this than anything else? Are social entrepreneurs even paying attention to raging intellectual property debates - and, if so, how and why? What should they be asking? What should philanthropy be asking?

Lucy Bernholz is the founder and president of Blueprint Research & Design, Inc, a strategy consulting firm that helps philanthropic individuals and institutions achieve their missions. She is the publisher of Philanthropy2173, an award-winning blog about the business of giving and serves as executive producer of The Giving Channel on Fora.tv.

Posted by Katie Harrington

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Community Advisory Committees in Health Foundations

For six years, beginning in 2000, I worked for Consumers Union, the nonprofit publisher of Consumer Reports magazine, on a project that advocated for the creation of permanent community advisory committees (CACs) that health foundations would use as liaisons between their board of directors and the communities their foundations want to serve. More than 20 foundations have incorporated CACs as part of their structure.
Predecessors of mine at CU and colleagues at Community Catalyst developed the blueprint for foundation CACs, which were intended to increase the amount and quality of community engagement by the foundation and to assist with important assessments of community health needs.
Most CACs are separate from foundation governing boards. These CACs have significant community-engagement obligations, but have neither grant-making nor fiduciary duties. Without such duties, some believed CACs could turn most of their attention to community-engagement activities.
Now that foundations with CACs are maturing, it is helpful to reflect on the results of this experiment. Some CACs have disappeared because of conflicts with the board, mission confusion, absence of leadership, or lack of resources. Others are finding new ways to engage with, and represent, communities. Although it is difficult to assess precisely the success and impact of community-engagement techniques, several CACs appear to be thriving.
Preparing for the second decade of CACs, the Con Alma Health Foundation and Grantmakers In Health will be hosting a convening of CAC leaders from around the country this month. More information about the convening can be found at Grantmakers In Health. On the agenda are two major topics: strategies for effective community engagement and tools for measuring impact. Undoubtedly, these leaders will also grapple with many questions, including:

1. Should CACs be entirely separate from the governing boards? Is the inherent tension between separate CACs and governing boards helpful in advancing the mission of the foundation?
2. Should CACs be permanent? Are permanent CACs absolving boards of directors of their important community-engagement responsibilities?
3. Are CACs defining “community” properly? Are any of the ultimate intended beneficiaries of foundation grantmaking being left out under the foundation’s governing and community-engagement mechanisms?

While CACs exist primarily in health conversion foundations, lessons learned from this experiment may be helpful for other actors in the nonprofit sector, especially grant-making and grant-seeking organizations hoping to connect better with the communities they serve.

But what do you think? Are you one of those nonprofit actors, or have you had experience with a CAC? What strategies should CACs use to connect with their communities?

Scott Benbow is a philanthropy specialist in San Francisco. Since graduating from Columbia Law School, he has practiced law in the United States and in three other countries.

Posted by Katie Harrington

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Openness for Technology and for Techies!

Two weeks ago, I had the opportunity to attend NTEN’s NTC (Nonprofit Technology Conference). It was a fantastic gathering of folks from every sector of the nonprofit world who had come together to share ideas, learn, and collaborate about new technologies that can help us do our jobs more effectively and efficiently (while having more fun). One of the most interesting sessions I attended was about being a true leader in your organization; not just a techie. 

We may have a special lingo and geeky open source stickers, but what we techies can bring to the larger team is a very valuable leadership position: We can make work more efficient for staff, help align programs and strategies, and provide tools for staff and departments to work collaboratively and share knowledge.  We can also guide decisions for the organization with our unique and important perspective.

The discussion made me think about user-generated content and the two-way flow of information that comes with adopting new social media components.  This is usually one of the biggest sources of fear for organizations just beginning on the road to web 2.0. But isn’t the openness to letting go of control of the message and specific content similar to the opening of leadership opportunities for staff? (And shouldn’t it be that neither creates fear in the organization and its leadership team?)

Organizations that are the most successful in building community online are those that can distribute information AND listen, create conversations AND follow those of others. Isn’t this true of organizations that are successful in building dynamic leaders? If organizations’ leadership teams enable tech staff to provide input and insight, those techies move away from the “just techie” side of things, and into being a leader. If organizations’ leadership teams enable tech staff to be part of the strategy development process, I would bet that the strategy would look different and that there would be less confusion, delay, and/or implementation time.

The biggest requirement for the technologist (and the leadership team) in this situation (moving from the techie to the leader) is the knowledge of and involvement in the creation of the organization’s “business” goals - how else one can provide the technology piece of the equation properly. “New media” has many terrific tools, but the technology layer should be put in place only after the other goals are worked out. 

Social media tools are put to the best use in outreach campaigns when the campaign is designed first, and the technology is integrated as it aligns. Just like this process, tech leaders need to be a part of the development and shared knowledge of the organization’s goals so that the best technologies can be used in the most appropriate ways.

So how are you, as a techie, working on becoming a leader for your organization? Or, how are you, as a non-techie, enabling those who are “just techies” to become leaders?

Amy Sample Ward’s passion for nonprofit technology has lead to her involvement with NTEN, NetSquared, and a host of other organizations. She shares many of her thoughts on nonprofit technology news and evolutions on her blog.

Posted by Katie Harrington

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Stand for Something

Imagine you are the new CEO of a publicly-supported grantmaker that has suffered declines in funds raised over the past 10 years. Would you choose to: 

• Redefine your primary purpose to be fighting poverty?
• Lead your large board of directors, overwhelmingly from large corporations, to make a substantial commitment to policy advocacy?

Such a strategy carries high risk, but it may also offer high rewards. In their canonical article “Philanthropy’s New Agenda: Creating Value,”¹ Michael Porter and Mark Kramer identified “changing the environment” in which grantees operate as the highest level of strategic impact a foundation could hope to achieve. (The others, in ascending order, were consistently choosing the best grantees over time, attracting support to those grantees from other funders, and improving the performance of grantees.) Not all “game changing” initiatives involve policy changes, but in many fields, such as health, human services, the environment, education, and social justice, potential policy changes comprise a commanding share of potential high-impact strategic goals. 

The same case for pursuing a policy strategy applies to nonprofits as well as to foundations. This is something I’ve always emphasized to nonprofit boards and executives when discussing the propriety and benefits of policy advocacy. Organizations trying to prevent foster children from becoming homeless, for example, should also keep an eye on how policy affects that purpose.  Sounds reasonable enough – that’s the case they should make to their boards of directors, and be prepared to make to the broader public.

That’s all fine for foundations with their endowments, I often hear; but what about the risks to a nonprofit’s ability to raise funds and attract volunteers? 

Community foundations have struggled with this dilemma for many years.  Facing competitive pressures from organizations like Vanguard or Merrill Lynch, some community foundations have sought to compete on the basis of efficiency and service to donors, while others have instead emphasized the change they hoped to help create through their philanthropy. Emmett Carson, president of the Silicon Valley Community Foundation, and former president of the Minneapolis Community Foundation, has made a very persuasive argument that, while it may alienate some donors, taking leadership on community issues in the end should attract even more donors and more passionate commitment to the organization. 

The United Way of Greater Los Angeles is one organization that has taken this high-risk strategy. Its example may hold a number of lessons for advocates of funding for social change, and for funders who, whatever their motives, are looking to boost their impact. (I describe why and how they made this shift in this article in Responsive Philanthropy, NCRP’s quarterly journal.) It is too soon to tell whether its new strategy will reverse the downward trend in donations to UWGLA, and there are some who are skeptical about the motives behind the shift. But there is little doubt that the new focus is widely perceived in the Los Angeles philanthropic world to be a major step forward (based on comparing data from interviews with funders over two years ago to similar interviews last summer).  When I asked Elise Buik, UWGLA’s President, about Emmett Carson’s argument that asking donors to join a cause will attract more support over time, she responded, “Well, when you stand for something, you definitely attract new people, and good things can follow.”

UWGLA’s example also may say something about whether board members, who can be quite conservative and risk averse, are as likely to oppose adding policy goals to the mix as is commonly thought. I was recently fortunate to make a presentation to their board about the law governing policy advocacy for nonprofit organizations. Having made dozens of similar presentations to nonprofit directors and leaders, I was amazed at how little controversy was expressed among the board members about the decision to commit to take policy positions. Some of this, no doubt, was due to the work UWGLA staff had done over many months to prepare the board for this step, but it also seemed that the board members – three out of four from large businesses – already knew well the value of lobbying. As Matt Miller has argued, big business has found that well executed lobbying can deliver unbeatable returns. 

1. Free access to the article is also available here – use your own best ethical sense.

Peter Manzo is the director of strategic initiatives for the Advancement Project, a civil rights advocacy organization, and a senior research fellow with the Center for Civil Society in the UCLA School of Public Affairs. Previously, he was the executive director and general counsel of the Center for Nonprofit Management. 

Posted by Katie Harrington

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Short-term vs. Long-term Focus in Philanthropy

In the summer 2007 edition of the Stanford Social Innovation Review, Charles Conn, a senior advisor to the Gordon and Betty Moore Foundation and a high tech executive, wrote about the short-term focus of most foundations in an article titled Robbing the Grandchildren:

“If future generations could vote on how foundations invest their money today, would they choose the current allocation? Byron Swift, chair and executive director of the World Land Trust, suggested this thought experiment to me, and I am disturbed to find that my answer is no…U.S. charitable foundations are better positioned than companies, governments, and universities to address these long-term, potentially catastrophic problems. One of the few sources of long-term risk capital, they control more than $500 billion in assets, generating funding that with other charitable giving totals almost 2 percent of GDP. With Warren Buffett’s gift, the Gates Foundation alone will control more than $60 billion in assets and $3 billion to $5 billion in annual spending. Other foundations closely associated with the digital revolution (such as Dell, Ellison, Packard, Hewlett, Moore, Omidyar, Page and Brin, Yang) could account for at least $50 billion to $70 billion more.

Perversely, though, many of these new tech entrepreneurs are worsening foundations’ shortsightedness by implementing businesslike metrics and controls in a way that reinforces short-term thinking and behavior. Other questionable management practices, such as low payout rates and lack of coordination with other organizations, further aggravate foundations’ myopia…A recent movement, sometimes called philanthrocapitalism or venture philanthropy, seeks to avoid complacency and lack of focus in foundation management by introducing rigorous success metrics and accountability practices. Many of these new-style foundations limit their scope to a few problem areas and, like corporations, intensely monitor outcome metrics, often with tight windows for review. To those of us who came to foundation work after a career in business, this sounds eminently sensible; after all, the foundation world is littered with fragmented, unfocused, and failed programs…This short-term, metric-focused approach likewise hampers grantees. Foundations take the passionate and committed people in these institutions and harness them to near-term indices of progress. Grantees, in turn, stop playing the long-term game in order to keep the money flowing. They aim lower, too.”

I agree completely with Conn’s thesis, but I want to elaborate, since Conn fuses “short-term,” “metric-focus,” and “businesslike” as if they automatically go hand in hand.

In the stock market, most people have become more and more short-term oriented. In the 1950s, investors held stocks for an average of 7 years. Today the average is 11 months. Investors have gained access to vast amounts of information they never used to see; and yet in many cases, this information has resulted in investors frequently changing their minds rather than gaining more conviction in their decisions.

However, almost all great investors make financial decisions based on a long-term outlook, not a prediction of what will happen in the next three months. At the investment management firm in which I am a partner, we talk about “arbitraging other investors’ time horizons.” In other words, we try to identify situations where short-term bad news about a company causes other investors to sell the stock so that we can buy it at lower prices. We use short-term good news that causes a stock to move higher to sell stock in companies whose longer-term outlook we think is deteriorating. Warren Buffett, or most any great investor, will tell you that Wall Street’s obsession with quarterly earnings reports is misplaced. Some companies (such as Coca-Cola, a company Buffett has owned a long time) have stopped issuing guidance to investors regarding what their next quarterly earnings might be.

Frequently, a short-term focus goes not with a quantitative metric focus, but with knee-jerk emotional reactions. When an investor buys a stock and then sells it soon after based on “bad news,” it is highly unlikely that the new information justified a reversing of the investors’ position. More likely, the investors threw out the fundamental reasons they chose to buy the stock and decided to sell out of fear.

It is human nature to want results as quickly as possible. But to achieve success, we must match our investment decisions to our time horizon. If we want to fix a local school because our child will be attending starting next year, then it might make sense to focus on short-term solutions. But most donors fund issues because they want to have a sustained impact on a situation. The techniques that might reduce crime in a bad neighborhood the most over the next month are unlikely to be the techniques that will have the largest, permanent impact on reducing crime rates over the next couple of decades.

Financial market participants are often short-term focused. They often focus on metrics that describe short-term conditions, but do little to illuminate long-term trends. But great investors and great philanthropists must focus on the information that matters to the long-term success of their projects. The short-term focus that Conn complains about may well be a problem common to many people in business. But it is a characteristic of meritocracy, not of the best business minds. Metrics and businesslike thinking have a place in philanthropy (but in no way are the best approaches to every problem). But short-term thinking is rarely useful.

Disclosure: Nothing in this post should be considered investment advice.

Sean Stannard-Stockton is a principal and director of Tactical Philanthropy at Ensemble Capital Management. Ensemble Capital provides families both traditional investment management and philanthropic planning. He is the author of the blog Tactical Philanthropy and writes the column On Philanthropy for the Financial Times.

Posted by Katie Harrington

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Bernholz’s Law of Philanthropic Adaptation

Late on a Friday afternoon (April 8), feeling a little punchy after a long week, I posted Bernholz’s Law of Philanthropic Adaptation 1.0. Then I wound up thinking about it most of the weekend. Here is the first upgrade.

Bernholz’s Law of Philanthropic Adaptation, 1.1:

The rate and cycles of philanthropic adoption of new technology follow a fairly predictable pattern, regardless of technology. This pattern is:

• Phase Zero – ignore new technology.
• Phase One of philanthropic adoption of a new tool is fundraising. (See this application of iPhones)
• Phase Two (in the case of bet2give phase one and two are simultaneous) is using charitable giving as a means of attracting customers to some other business model. (See good2gether  or goodsearch)
• Phase Three is using the tool to publicize the philanthropic status quo (see almost every foundation website)
• Phase 3.5 – meanwhile, real change will begin happening on the edges, as innovators recognize the implications of lowered transaction costs and global attention (see globalgiving or networkforgood).
• Phase Four involves trying technology to change the edges of philanthropic practice (see Packard Foundation’s Nitrogen Wiki).
• Phase Five brings us to the conference circuit, where we will learn (perhaps with some bemusement) about technology applications that “came in from the edge” and are now discussed as mainstream. ( globalgiving and networkforgood)
• Phase Six – we watch in envy as a real twist or two in the playing field as we know it happen, and kiva.org reshapes microfinance and donorschoose catches public school foundations off guard. They also get adoring press attention.
• In Phase Seven – big foundations amplify attention on “little” innovations and while attention is directed there…
• …Phase Eight begins, in which the reality of how change happens is setting in and new philanthropic supports for these new ways of being are being created (while we’re looking elsewhere.) In other words, we’ve entered phase one of a new cycle.

Lucy Bernholz is the Founder and President of Blueprint Research & Design, Inc, a strategy consulting firm that helps philanthropic individuals and institutions achieve their missions. She is the publisher of Philanthropy2173, an award winning blog about the business of giving and serves as Executive Producer of The Giving Channel on Fora.tv.

Posted by Katie Harrington

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Telling Stories

We all know that telling stories is an effective and fun way to inform others about our programs—what’s worked and what hasn’t—and to garner support for them. But telling stories about our organization and staff is just as important, since it helps to create community.

Stories are powerful because they can: 

• Explain something complex or hard to believe in an understandable, manageable way
• Change someone’s perspective on an event, person, place, or issue
• Bring together people who otherwise would not have known about each other
• Change a situation or topic from taboo or uncomfortable to accepted and approachable
• Create a safe place for ideas, fears, questions, and wonder
• Start a conversation, as well as friendships, that will continue long after the story

To tell stories internally (to people from the organization, and not those served), you could:

• Start a staff blog to discuss volunteer work, personal projects, life lessons learned, etc.
• Post short videos on the staff page instead of photos of staff members, letting individuals share their passion for the organization, their focus area, or their job duty
• Create a group in Flickr or another photo-sharing tool so staff can post videos from events or the office
• Collect staffers’ individual descriptions of the organization’s projects to post collectively
• And much more

When it comes to telling stories from the inside, imagine a ladder whose rungs are:  blogs,  podcasts,  videos,  live chat, and so forth, all of which contribute to elevating the story.

How have you told stories from your organization? How could you add to the stories of your clients ormembers with your staffers’ stories?

Amy Sample Ward’s passion for nonprofit technology has lead to her involvement with NTEN, NetSquared, and a host of other organizations. She shares many of her thoughts on nonprofit technology news and evolutions on her blog.

 

Posted by Katie Harrington

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“I’m Not on Earth to Build Pillsbury United”

What do you say to a nonprofit leader who can’t let go of their brand? “I’m not on Earth to build Pillsbury United.” I couldn’t have said it better, Tony Wagner, long-time executive director of Pillsbury United. Tony is a founding member of a unique collaboration of five human service agencies which formed the Metropolitan Alliance of Connected Communities or MACC Commonwealth, on Jan. 1, 2006, a consolidated service organization. Tony and four of his colleagues realized that they needed to put their clients – and not their brands – first. Their organizations were not as efficient individually as they could be together. So they joined forces.

They call themselves a hybrid operation, but to me, they’re what strategic restructuring experts call a “management service organization.” MSOs are hot right now because they might lower operating costs for individual nonprofits and guarantee each organization’s independence. You could gain the benefits of a merger without losing your autonomy.

The five organizations in MACC, whose combined budgets total $35M, jointly provide administrative functions such as accounting, office technology, and human resources. Their goal is to operate more efficiently and to share best practices to benefit their clients. Yet they still maintain their independent identities, governance structures, and programs.

Initially, the group started out small, with three nonprofits; later two more joined the group. Today, there are seven members of the collaborative. All five of the founding members were human service agencies focused on self-sufficiency programs for families and communities experiencing similar government and philanthropic budget cuts. That kind of mission and operational alignment created synergies for the collaboration and eased the collaboration process quite a bit.

The results show that the collaboration is meeting its goals. At the end of 2007 – after just one year of operation - the MACC Commonwealth agencies reported that their members served 1,000 additional clients and saved their members $200,000 in annual costs. These are impressive results.

The MACC Commonwealth has been so successful, in fact, that it has drawn notable attention including a paper published by the Humphrey Institute that won first place at a national conference on nonprofit best practices.

Tough times call for new thinking. Tony Wagner said it best, in an article in the Minneapolis-St.Paul Star Tribune: “Our primary purpose is to serve people, to serve communities.” Right you are, Tony.

Jean Butzen, Mission Plus Strategy consulting, specializes in mergers and alliances in the Chicago area.

Posted by Katie Harrington

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The Davos of Philanthropy: First Impressions

Yesterday, I arrived at the Council on Foundation’s annual conference entitled, “Philanthropy’s Vision: A Leadership Summit.”  For the next four days, I will post a round-up of my experiences at the conference for readers of the opinion blog at the Stanford Social Innovation Review. 

As a micro-philanthropy consultant and blogger, I have focused most of my attention on the tools that make small-scale grant-making possible, including DonorsChoose, Kiva, and Facebook Causes. But micro-philanthropy also encompasses new ways of thinking about donor engagement, the grant-making process, and program evaluation. I’m looking forward to using the Council on Foundation’s leadership summit as an opportunity to focus on these other issues.

Here are a few questions I have going into the conference:

• What interest do brick and mortar foundations have in using technology to broaden participation in grant-making?
• How can we overcome the perception that technology-assisted philanthropy is a phenomenon for the next generation to figure out?
• In what ways can micro-philanthropy facilitate co-funding opportunities and unlikely partnerships among activists, foundations, and the corporate sector?
• Is there interest on the part of foundations to use technology to collaborate, or at least create the appearance of collaboration?

I expect to find some clues in the next few days that will help me piece together a few initial answers to these questions. For the duration of the conference, I will be wearing my blogging hat only. I’ve committed myself to asking questions, listening, and learning from the incredible gathering of people.

Of course, I have my own experiences and ideas to bring to the debate. But I’ll be leaving my preconceptions at the door. I’m entering the conference with fresh eyes on an issue that’s very dear to me.

Day 1 Round-up: May 5, 2008

I find myself on the edges of what could easily be called the “Davos of Philanthropy.” Roughly three thousand attendees have flown in from across the globe to discuss the current and future states of global philanthropy.

A few phrases from the opening statements of Steve Gunderson, the Council on Foundations executive director, jumped out as worth noting:

• “Philanthropy must become a movement, more than an institution”
• “Our greatest power is not in the checkbook but in our vision.”
• “Either we frame the conversation about philanthropy, or our detractors will.”
• “Market economies are best when joined with a strong philanthropic movement.”
• “If we do not believe change is possible, we cannot be philanthropists.”

Gunderson’s remarks were followed by a video essay from Roger Rosenblatt, contributor to the MacNeil/Lehrer NewsHour. Rosenblatt’s vision of the future of philanthropy jives 100 percent with the potential I see in micro-philanthropy to transform traditional philanthropy into a vibrant, inclusive and very public force for good.

The big ideas of Rosenblatt’s video testimony:

• Ordinary citizens are left out of contemporary philanthropy
• Non-philanthropists equate philanthropy with charity, as opposed to strategic efforts to solve the world’s most pressing problems.
• Philanthropy can make use of ordinary citizens, who would amplify the work and mission of foundations
• Foundations should reconsider their inclination to “work in the shadows”
• When foundations take a more public role in the media, they will reframe the news from a conversation about problems into a platform for demonstrating that problems have solutions.

That the Council on Foundations chose to feature this video statement from Rosenblatt in the opening session suggests that there’s interest in broadening participation in philanthropy. I’m excited to ask attendees what they thought of the message, and whether it resonated.

Peter Deitz is a micro-philanthropy consultant and the founder of Social Actions, a website that helps individuals and organizations use social media to plan, implement, and support peer-to-peer social change campaigns so that grassroots solutions to local and global problems can flourish.  He also writes a blog about micro-philanthropy.

Posted by Katie Harrington

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Philanthropy 2.0: A Video Q&A

Yesterday at the Council on Foundation’s annual conference, the session entitled Philanthropy 2.0 featured a star-studded panel. The founders of DonorsChoose, Facebook Causes, and The Motley Fool were joined by the East Coast Development Manager of Kiva.org and the Director of Social Investment for The Case Foundation.

Roughly 150 people attended the session, choosing Philanthropy 2.0 over a host of other really awesome sessions.  Session facilitator Sharna Goldseker, vice president of the Andrea and Charles Bronfman Philanthropies, took a quick survey of the audience. The attendees consisted of 30 percent family foundations, 40 percent community foundations, 5 percent corporate foundations, 10 percent private foundations, and 15 percent foundation consultants and advisors.

For the first hour of the session, the presenters showcased what they have been doing with web 2.0 and philanthropy. For those who aren’t familiar with the platforms listed above:

DonorsChoose.org – A donation site that connects teachers who need supplies for classroom projects with citizen philanthropists interested in funding the projects. (67,400 donors, $1.2 million since 2000)

Facebook Causes – A popular application on Facebook that permits anyone to start a fundraiser on behalf of a registered 501c3 organization. (12 million users, $2.5 million raised since 2007)

Kiva.org – A community of advocates of micro-finance that permits individuals to make loans to small-business owners in the developing world. (270,000 lenders, $28 million lent since 2004)

The Motley Fool – A web 2.0 financial investment community that also runs an annual program in which investors make donations to a select list of charities.

The Case Foundation – A family foundation started by AOL founder Steve Case that has invested heavily in the tools that make micro-philanthropy possible and has run several contests that encourage individuals to become citizen philanthropists.

After the presentations, the conversation gave way to a “Q&A” session, in which foundation representatives asked the panel how philanthropy 2.0 could impact their own work.

Here is a video of the Q&A. (From left to right: Michael D. Smith, director of social investment, The Case Foundation; Rupa Modi, East Coast development manager, Kiva.org; Tom Gardner, co-founder, The Motley Fool; Charles Best, founder, DonorsChoose.org; Joe Green, founder, Facebook Causes)

Yesterday morning I also attended a session entitled Social Entrepreneurship: New Approaches to Changing the World. The session featured several notable speakers including: Bill Drayton, CEO and chair of ASHOKA; Brian Trelstad, chief investment officer for Acumen Fund; Erich Broksas, vice president of business development for The Case Foundation; J. Gregory Dees, professor of the Practice of Social Entrepreneurship at the Center for the Advancement of Social Entrepreneurship; and Jed Emerson, project manager of Strategy and Performance for The Edna McConnell Clark Foundation.

By the end of the day, I felt compelled to draw up a list of seven tips I had heard for foundations looking to “push the envelope” of philanthropy. The following ideas come from the two sessions I attended and an interview with Bill Somerville, author of Grassroots Philanthropy: Field Notes of a Maverick Grantmaker.

Here are the suggestions, in no particular order:

1. Put young people on your board, or consider creating a junior board for generating new ideas in grant-making, program evaluation, and technology-assisted philanthropy. (Source: Participant in the “Social Entrepreneurship” session)
2. Create room for “high risk/high reward” grants, and learn from any failures. As a foundation, having philanthropic “scar tissue” could be a good thing. (Source: Presenter in the “Social Entrepreneurship” session)
3. Open source the design of micro-philanthropic solutions, ie, integrate your constituents’ ideas and preferences into the planning and implementation of grant-making programs. (Source: Charles Best, DonorsChoose.org)
4. Use social networks to tell people what organizations your foundation is funding, and why. This will permit you to serve as a scout for citizen philanthropists looking to make informed decisions about where they can direct their philanthropic dollars. (Source: Joe Green, Facebook Causes)
5. Experiment with using social media. Don’t worry if it doesn’t work out. On the Internet, you can always maneuver quickly when something isn’t having the results you expected. (Source: Rupa Modi, Kiva.org)
6. Commit your foundation to funding nonprofits and to creating more change-makers in the world. A society of change-makers will solve the problems your foundation cannot solve on its own. (Source: Bill Drayton, Ashoka)
7. Trust your program staff to make grants. This will speed up the process of moving money to where it’s needed most. Board members can confirm the grants after the fact. (Source: Bill Somerville, Philanthropic Ventures Foundation)

Peter Deitz is a micro-philanthropy consultant and the founder of Social Actions, a website that helps individuals and organizations use social media to plan, implement, and support peer-to-peer social change campaigns so that grassroots solutions to local and global problems can flourish.  He also writes a blog about micro-philanthropy.

Posted by Katie Harrington

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Vision, Leadership, and Partnership

On Tuesday evening, the famed cartoonist Milt Gross made an appearance at the Council on Foundations annual conference. In a session called Strategic Philanthropy: Theory and Practice, the speaker Paul Brest, president of the William and Flora Hewlett Foundation, flashed on the monitor a cartoon of howling wolves gathered at the edge of a cliff. One of the wolves had taken a break from howling to ask his companions, “My question: Are we making a difference?”

The attendees at this week’s philanthropy summit in Washington D.C. met up to ask themselves the same question. As a blogger, I wasn’t privy to many of the intimate conversations among colleagues and close friends in the foundation world. I didn’t hear the uncertainties that were no doubt expressed in whispered voices between conference sessions and at the gala events. Instead, I heard bold proclamations on what it takes to make a difference: namely, the right combination of vision, leadership, and partnership.

In his presentation about strategic philanthropy, Brest presented an outline of his foundation’s approach to all three points. For vision, Brest said a foundation must first establish a viable theory of change. “If your theories of change are incorrect, your interventions will only be right by accident,” warned Brest.

He had just finished explaining a case study in New York City in which police implemented a program to reduce crime by arresting people for petty offenses. Crime went down, which was the desired effect. During the same time, however, crime also dropped in cities that had not implemented a similar program. In this case, the desired impact may not have been linked to the city’s theory of change. 

Brest went on to discuss the importance of maintaining an “expected return attitude,” in which every effort is made to assess an intervention’s cost and likelihood of success. Doing so permits grantmakers to recognize and mitigate risks; justify large expenditures with the prospect of high returns; and be candid if and when failure sets in. He also emphasized the need for complete “logic models” to explain how change happens and evaluation criteria to measure success along the way.

According to Brest, failure to demonstrate leadership in these respects can result in wasted money, or worse, “unanticipated bad consequences.” In seeking partners, the William and Flora Hewlett Foundation looks for grantees and co-funders who share a similar theory of change and demonstrate willingness to candidly assess each program during and following an intervention. Brest’s professionalism commanded respect in the room full of his peers and colleagues. Quiet in his delivery and precise with his words, I was left thinking that calmness is king in vision, leadership, and partnership. 

On the following day, “Teacher of the Year” and bestselling author Ron Clark tore this hypothesis to pieces during his closing plenary of the leadership summit. Clark, who jumps rope “double-dutch” with his middle school students, delivered half of his speech while literally jumping from table to table in the closing plenary ballroom. I have never seen a more hyperactive successful adult.

In an abandoned factory turned state-of-the-art school, Clark has setup a scholastic program that transforms Atlanta’s poorest school children into over achievers. How? By mixing together the same ingredients that Paul Brest documented with Pentagon restraint.

Clark’s school has honed and implemented an accurate theory of change. That is children perform best when their instructors have high expectations, maintain rules, believe in their students’ futures, and serve as living role models of creativity, innovation, and free thinking. Clark has created a partnership with his students, their parents, and school staff by winning them over to this theory. Together, they are reaching unlikely heights of academic achievement and preparing “a new generation for leadership in a globalized world.”

Clark’s description of his school in Atlanta reminded me of a quote I heard earlier in the day. Andrew Gillum, director of the Young Elected Officials Network commented on the electoral success of young people of color, including himself. “We did the impossible, because we didn’t know what was supposed to be impossible.”

At the end of Ron Clark’s Broadway performance renamed a closing plenary, the audience of more than 1,000 grantmakers gave him a standing ovation that extended for minutes. It sounded like wolves howling. They stood up to applaud the fact that at least one among them was making a difference by harnessing the right combination of vision, leadership and partnership.

Peter Deitz is a micro-philanthropy consultant and the founder of Social Actions, a website that helps individuals and organizations use social media to plan, implement, and support peer-to-peer social change campaigns so that grassroots solutions to local and global problems can flourish.  He also writes a blog about micro-philanthropy.

Posted by Katie Harrington

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Big Challenges in Nonprofit Growth

The charitable marketplace keeps growing, putting even greater pressure on nonprofits and their supporters to run smart, lean, responsible operations.

Nonprofits employ more people, generate more revenue, and contribute more to the U.S. economy, says the just-released Nonprofit Almanac 2008.

But growth alone does not ensure that nonprofits are making the best use of their resources.

Sadly, the charitable marketplace is saddled with fat and inefficiency.

Fueled by a sense of entitlement and righteousness, far too many nonprofits focus more on perpetuating their own organizations than on improving the way they do business or deliver services.

And while their services often overlap, far too few nonprofits are willing to truly consider, let alone pursue, consolidating their operations or even merging their organizations.

Having cultivated their own donors, volunteers and customers, nonprofits invest more time in defending and expanding their turf than in looking for the best way to put common community resources to work to address common community problems.

Nonprofits do not bear sole blame for the sloppy and self-absorbed way many of them operate.

Lacking the will or courage to ask tough questions or to encourage collaboration, foundations and other supporters are the enablers of nonprofits’ waste and turf-driven mindset.

By continuing to invest in nonprofits without challenging them to be more efficient, open and collaborative, foundations and other supporters simply perpetuate the feudal fiefdoms that divide and weaken the charitable marketplace.

To address the symptoms and causes of the urgent social problems we face, the charitable marketplace needs to do a lot better.

Todd Cohen, a veteran news reporter and editor, is editor and publisher of Philanthropy Journal, an online newspaper published by the A.J. Fletcher Foundation in Raleigh, N.C.

Posted by Katie Harrington

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Wiki Adoption in Nonprofits

Last night at the Portland Net Tuesday event for May, we discussed the myriad ways nonprofits could use a wiki. Many people wondered, how do we ease a wiki into an organization? What are the first steps?

To introduce a wiki, you should:

1.  Ask yourself this question: What goal do we want to accomplish by using this wiki? 

Having the end goal in mind helps guide both initial set-up of the wiki and conversations with staff as it’s introduced. Do you want to use the wiki as an internal collaboration tool for restaurants close to the office, a place to share ideas about future projects, a shared space for event planning, or for working together on grant applications and letters? All of these goals are fine, but they all indicate very different uses of the wiki.

2.  Start the wiki off on the right foot. 

For people who have never participated in a wiki, a single blank white page is not inviting—even for those who have used a wiki before. You are only setting yourself up for a lot more work if you send out a link to the wiki, with nothing but a title and the hope that people will dive right in.

It is a wiki, so its initial structure may or may not last. It is important to have something in the wiki for people to edit, read, and slowly participate in. Include the goal in a short introduction on the main page—why are you introducing the tool to the organization? Next, add a couple of links and new pages to explain the spread of topics and conversations, and suggest possibilities for content on those pages and on new ones. Some people even add spelling or grammatical errors so people click “edit” at least once to fix the glaring mistakes!

3.  Invite them and ask them, over and over.

The ”invite” happens mostly outside and the “ask” mostly inside the wiki. Invite your group (just a few staff members, a team, the whole organization, or your membership base) to use it! This goes beyond the initial introduction. Inviting is something that you should do as often as possible. For example, if you get an email from someone on staff asking about a project that you know is discussed in the wiki, keep your content in the wiki and include a link to it in the email; invite the person to continue the conversation with you and the rest of the staff there. 

As a participant, and as an organizer in the wiki, it’s helpful to include actionable tasks throughout the wiki, especially in the initial phase; this encourages participation. Someone may read a page that explains the early planning of an after-school program your organization might be spearheading and think, “well, that’s nice,” but they won’t immediately see what they should edit on the page. Instead, after an explanation of the project, include a few questions, such as: Do you have kids participating in an after-school program in town? How many staffers should be hired? Which school(s) should we interview? Those questions are actionable—everyone has an answer that is valid and can be included just by hitting edit, typing a quick response, and saving. Plus, once a few folks have entered their answers, the door opens for conversation around their input or even similarities between staff and programs.

To sum it up: Choose a goal, plant some content, invite, and ask.

There is a plethora of information available on wiki adoption including nonprofits that already use wikis internally and externally.

Do you have a project that could benefit from using a shared space, instead of hundreds of emails or lost hand-written notes? Has your organization already considered a wiki? I’d love you to share your success stories.

Amy Sample Ward’s passion for nonprofit technology has lead her to involvement with NTEN, NetSquared, and a host of other organizations. She shares many of her thoughts on nonprofit technology news and evolutions on her blog.

Posted by Katie Harrington

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Storytelling for Nonprofits, in New Media and Old

For years, Chicago’s Community Media Workshop has performed the honorable work of helping nonprofits get the attention of reporters and editors. This has involved presenting nonprofit staffers with a few unpalatable truths, specifically, that their events and programs are not news, while the media is in the business of reporting news. But this year at its Making Media Connections conference, those truths will be served up with a dollop of “telling our own stories” cream; and the Nonprofiteer wonders if that’s a good thing.

The annual conference (taking place next week, June 11-12) will feature an agglomeration of so-called Web 2.0 specialists—people experienced in using new media to get nonprofits more attention. This shift in program reflects a wider shift away from the old paradigm (businesses and charities pitch, editors decide, citizens hear the filtered result) to the blooming confusion of hyper-local Websites, social media networks, and opinion-shaping blogs and podcasts. And here are my concerns:

• The problem with “telling our own stories” is that many subjects—and writers, for that matter—are weak in the important skill of putting themselves in other people’s shoes. We all know nonprofit staffers who simply cannot comprehend how anyone could fail to be passionate about their agency’s mission, simply because they themselves have such passion. This self-righteous attitude is not only unpersuasive, it’s counter-persuasive.
• It is more important for nonprofits to do their job than to focus on media coverage. The most important question for an agency to ask at the beginning of pitching to a reporter, creating a Facebook page, or launching a blog, is, “Who are we trying to reach, and for what purpose?” If your goal is to make money jump out of people’s pockets, telling your story is less important than getting hooked up with a social-media donation site. If you want to strengthen your own advocacy efforts with legislators, telling your story is less important than identifying registered voters who will contact their elected representatives.

I’m not saying that Community Media Workshop—which also sends “news tips” to reporters highlighting the newsworthy activities of its nonprofit constituency—is doing the wrong thing by lessening agencies’ dependence on the press. If nothing else, the current emphasis on new media may help nonprofit staff educate and diversify their boards. Educate by making clear that the constant board cry—“Get some newspaper coverage!”—has even less potential today to solve a nonprofit’s financial and name-recognition difficulties than it did 15 years ago. Diversify by helping boards overloaded with old people, as most of them are, learn how to speak to the all-important next generation in its own language—or at least in its own forum.

For two decades, the Workshop has demystified the process of public communication for charities. Its new approach to teaching storytelling is a worthy and seamless continuation of that.

Kelly Kleiman, who blogs as The Nonprofiteer, is a lawyer and freelance journalist whose reportage and essays about the arts, philanthropy and women’s issues have appeared in The Wall Street Journal, Washington Post, Christian Science Monitor and other dailies; in magazines including In These Times and Chicago Philanthropy; and on websites including Aislesay.com and Artscope.net.

Posted by Katie Harrington

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One Click Giving Infrastructure

Over the last few years we’ve grown accustomed to:

• click to give
• searching for things on the Internet and having some of the revenue we generate for the search engines redirected to a nonprofit
• supporting prostate research, diabetes research, or cancer services when we checkout at the grocery store

Heck, we’ll even turn loose our inner word nerds to support the World Food Programme.

But how do you know which site to use for your $50 gift?

• If you want to give globally you can try GlobalGiving or give2asia.
• Want to support microfinance? Try MicroPlace or Kiva.
• Local interests in the USA? NetworkForGood, Case Foundation, or the Catalogue for Philanthropy.
• Public schools and teachers matter to you? Use DonorsChoose.
• Want to put every one of your dollars to work as both a gift and an investment? Try RSF Social Finance or Calvert Giving Fund.

We need a one-stop directory of these sites. Just as foundations of all kinds began organizing themselves a few decades back, it is time these online marketplaces do the same, to enhance public awareness, regulatory input, joint research, and shared interests in developments regarding technological/infrastructure/charitable law.

The “disintermediation” that the Internet promised way back in the 20th century is now an assumed part of the philanthropic landscape. I predict it will soon be building its own industry supports (infrastructure).

One thing I noticed as I compiled the bullets above is the absence of two key sectors—the arts and the environment. Scanning my memory bank, I came up blank on online giving sites/communities/intermediaries focused broadly on environmental or arts/cultural giving. Help me out; send me the sites I’m missing. Or better yet, start the directory and build the new infrastructure.

Full disclosure: I’ve worked with or know individuals involved in running the sites listed above. I’ve used some of these services but am not formally affiliated with any of them at the moment.

Lucy Bernholz is the Founder and President of Blueprint Research & Design, Inc, a strategy consulting firm that helps philanthropic individuals and institutions achieve their missions. She is the publisher of Philanthropy2173, an award-winning blog about the business of giving, and serves as executive producer of The Giving Channel on Fora.tv.

Posted by Katie Harrington

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Maps for Driving Change

Steve Jobs unveiled the new iPhone 3-G, to oohs and aahs. One of its most impressive features is a pairing of GPS and mapping that allows users to instantly locate themselves and search for nearby items of interest – restaurants, shops, etc. 

What will really impress me, though, is when we’re all able to see more information about people and resources. I’d bet anyone reading this can quickly search for a Starbucks, or some other commercial resource, anywhere around the globe. But what if you wanted to find which neighborhoods in your community had the highest rates of lower income Latinos with diabetes, or children living in poverty? What if you wanted to map the flow of foundation grants to various regions or neighborhoods?  What if you also wanted to find, and contribute to, that information through your cell phone?

As Buckaroo Banzai and Buddhist sages put it, “wherever you go, there you are.” But for too many people around the world, the inverse is true—wherever you are determines where you can go. Place matters to our quality of life far more than whether we can find good coffee or a particular kind of food or entertainment. Our prospects for enjoying clean air and water, healthy food, freedom from violence, and opportunities to learn may be tied more closely to where we live than any other characteristic. Place is where the intersection of race, class, and power is shown in starkest relief. 

Advocates, planners and funders are increasingly using GIS mapping to analyze a host of issues. Civil rights lawyers, environmental justice activists, and community organizers are using maps to anchor dialogue with community members, adding their on-the-ground knowledge to “official” data, and also to make their case to policy makers and judges. The same day as the iPhone launch, a group of academics and advocates gathered in Oakland to inform an Opportunity Agenda study on the use of maps to support health equity advocacy. Bill Lann Lee, former assistant U.S. Attorney for Civil Rights during the Clinton Administration and a co-founder of Opportunity Agenda, noted how much he and his colleagues would have liked to use maps (the way modern technology makes possible) when suing to stop the lead poisoning of low-income children or to prevent violations of voting rights.  Participants heard how the Kirwan Institute and Legal Services of Northern California use maps to make powerful cases for the harmful effects of structural racism, and also about how health researchers and government agencies are using GIS to analyze health and environmental issues.

Mapping also shows great promise for making visible the flow of grant dollars to specific places, the demographic and other attributes of those places, and even the specific subsets of people served in those places. HealthyCity.org  has developed innovative methods for mapping the service areas and branch locations of grantees and graphically displaying the relative size of grants, all on top of a set of more than 60 demographic and health indicators and the locations of resources such as schools, parks, fire and police stations, and other nonprofit organizations, for funders like The California Endowment, First 5 Los Angeles, and a coalition of 22 private and public funders supporting early childhood programs. 

As I’ve written elsewhere, this approach holds promise not just for planning, but also for accountability and philanthropic equity issues. Mapping the reach of grants may be far better than asking individual foundations and their grantees to gather demographic and other information, as a bill in the California Assembly, AB 624, would do. To take this approach to scale, we’d need to make the grants data already disclosed by foundations more accessible to advocates, and supplement that with data about the geographic and demographic reach of those grant funds. (This would mean bringing the grants databases out from behind the firewalls of services like the Foundation Center or Foundation Search, or paying the costs of providing free public access to that data.)

At the recent NetSquared conference on innovative use of technology for social good, GIS mapping was at the core of 7 of the 21 featured projects, out of 180 nominations from around the world. Here are short summaries, in alphabetical order (complete descriptions here):

• GreenMap.org presents global information on environmental resources and challenges, by supporting creation of local green maps by users (check out their well-designed iconography).
• HealthyCity.org offers interactive access to demographics and education, health, and human services resource data for Los Angeles County (version 3.0, launching June 18, will enable users to upload and map their own data against the site’s huge database, create groups to collaborate and comment on maps, “draw” their own neighborhood boundaries, and more).
• MapLight.org maps the geography of contributors to political campaigns.
• MoveSmart.org, a tool for encouraging people in the Chicago region to find housing in diverse neighborhoods to promote fair housing and integration.
• Rosetta Project maps the location of endangered languages and linguistic groups.
• Ushahidi maps reports of post-election violence in Kenya (this won first prize).
• YourMapper.org proposes adaptation of an interactive site offering information on attributes (such as crime) and resources in the Louisville, KY metropolitan region.

Early ancestors of Web-based GIS include Neighborhood Knowledge California (developed at UCLA by Neal Richman, one of the foremost evangelists of using GIS for community benefit), and the network of sites in the National Neighborhood Indicators Project, such as Metro Boston Data Common. Recent notable developments are VolunteerMatch, which adds the ability to map volunteer opportunities, and the launch of Policy Map. 

To casual observers, these mapping sites may seem alike – they all use GIS and are on the Web. On closer inspection, though, they are strikingly different. Some are interactive, others are not. Some aim to cover a huge area (wide and shallow), while others provide deeper information for more focused areas. Some are better designed to allow users to choose variables, compare more than one variable or geography, and display summary data or deeper information about data points. Some seek only to show information to visitors, others aim to gather information from users in the Web 2.0 vein, and still others have more detailed offline strategies for reaching people and groups that will actually put the information to use (you can probably guess my biases here).

Whatever you think about the potential benefits and shortcomings of GIS, we should expect this use of GIS mapping with in-depth demographic and resource data to grow quickly, and to be available over future generations of iPhones and other cell devices very soon.

Questions to address are:

• What are the types of purposes of Web-based GIS projects?
• What kinds of strategies do they follow for driving people to their sites, and for encouraging people to use (and contribute to) the information provided?
• How will Google influence, for good or ill, their development? (an issue both for those based on Google Maps and those that aren’t)
• What are, or should be, recommended practices regarding openness of programming, geo-coding, and data accessibility?
• What are the ethics of mapping (see the book How to Lie with Maps)?

Are there any questions or concerns you have about pro-social uses of GIS? Are there examples of the successful use of GIS that you’d like to share?

[Full disclosure: I am a proud co-founder and member of the governing partnership of HealthyCity.org, a project sponsored by Advancement Project, and am involved in supporting its continued development.]

Peter Manzo is the director of strategic initiatives for the Advancement Project, a civil rights advocacy organization, and a senior research fellow with the Center for Civil Society in the UCLA School of Public Affairs. Previously, he was the executive director and general counsel of the Center for Nonprofit Management. 

Posted by Katie Harrington

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Change Is a Continuous Job

Nonprofits and givers are in the change business, and the business of change continually requires changing the way we do business.

Too often consumed with the day-to-day grind of delivering services, meeting the payroll and raising money, nonprofit managers and leaders rarely take the time to think about changing the way they work so their organizations can operate better and smarter.

Yet the demands of a global marketplace transformed by technology and the seamless flow of people, jobs, capital and information has made it more urgent than ever that nonprofits adapt to the new economy and way of doing business.

Nonprofits and their leaders must learn to be social entrepreneurs, gearing their organizations not only to deliver services more effectively and efficiently but also to make change happen.

That means adapting to their organizations the enterprising, networked, collaborative and outsourced culture of the global economy.

Change as a vision must become part of the way nonprofits think and work, and the leaders of nonprofits must make entrepreneurial leadership a value and a lesson they look for and cultivate in their boards and staffs.

“Everyone a changemaker” is the mission of Ashoka, the international social-change organization that supports the development of social entrepreneurs.

And making everyone a changemaker requires inspiration and giving every problem “as much innovation as it can humanly get,” says Sushmita Goosh, Ashoka’s president emeritus.

Nonprofits are indeed in the change business, and making change happen requires that nonprofits and their supporters invest in finding and developing individuals dedicated to changing their organizations so they can work on making our communities better places to live and work.

Todd Cohen, a veteran news reporter and editor, is editor and publisher of Philanthropy Journal, an online newspaper published by the A.J. Fletcher Foundation in Raleigh, N.C. Cohen has taught nonprofit reporting and media relations at the University of North Carolina at Chapel Hill and at Duke University, and regularly speaks on the topics of nonprofit media relations and trends in the charitable world.

Posted by Kelsey Walker

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Your Brand Is Too Small

Many nonprofits have spent enormous sums of money and organizational energy on “branding.” The lucky ones are able to have it done pro bono by a large commercial ad agency—though judging from the work one typically sees from them, they’re giving the job to the interns.

The end product is usually a document—brand guidelines—that prescribes fonts, color palates, design practices, and often a short copy stylebook for the organization. The smarter documents also discuss the meaning of the brand. But even that is generally taken care of in a paragraph or two.

If you do brand-ing this way, you’re just changing your packaging.

A real nonprofit brand isn’t a “look.” It’s a movement.

While commercial brands must struggle to position the shoe, soft drink, or widget they sell as larger than life, your cause is, by definition already a superhuman, larger-than-life thing. Every nonprofit that does fundraising is a movement of idealistic people who want to make the world a better place and put their money where their mouths are.

Is that evident in your brand guidelines? Is your branding energy directed towards building, describing, and sustaining a movement? Or do you have a whole book dedicated to packaging?

Jeff Brooks is creative director at Merkle, a direct-response agency serving the nonprofit world.  He blogs at the Donor Power Blog.

 

Posted by Kelsey Walker

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Nonprofits Can Partner On Back-Office Tasks

Creating innovative strategies for social change is the focus of much of the widespread lip-service nonprofits and foundations give to the need for collaboration in the charitable marketplace.

But equally critical is the need for nonprofits to find ways to combine and share the cost of operating their back-office systems.

With the economy sinking and the cost of doing business rising, nonprofits face big challenges in running their shops efficiently and effectively.

Back-office collaboration among nonprofits could yield savings and efficiencies in securing and handling common business needs like paying rent and utility costs, providing employee benefits, operating software systems and databases, and working with consultants.

While far too few foundations will make grants to help nonprofits cover their operating costs, some foundations have been willing to invest in helping groups of nonprofits pay for products and services they can share.

Several years ago, for example, the Z. Smith Reynolds Foundation in Winston-Salem, N.C., paid for a handful of consultants to provide fundraising advice to groups that fight domestic-violence.

More recently, the foundation made a grant to help six water-conservation groups hire fundraising fellows for three years, provide them with training, and help pay for support services such as donor-database software they might share.

To help equip them to do a better job fixing the urgent problems our communities face, funders can make investments that spur groups of nonprofits to partner on back-office operations.

Through collaborations that help them reduce costs and operate more efficiently, nonprofits apply more of their time and resources to the larger job of making our communities better places to live and work.

Todd Cohen, a veteran news reporter and editor, is editor and publisher of Philanthropy Journal, an online newspaper published by the A.J. Fletcher Foundation in Raleigh, N.C. Cohen has taught nonprofit reporting and media relations at the University of North Carolina at Chapel Hill and at Duke University, and regularly speaks on the topics of nonprofit media relations and trends in the charitable world.

Posted by Kelsey Walker

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Hawaiian Nonprofits Say Aloha to Merger

I am a strategic re-structuring consultant and I love to collect stories about nonprofit mergers and partnerships. Daily I find such cases in my in-box from all over the country. Most are so run-of-the-mill they are not distinctive enough to write about in my blog. But today, I have one that is unique. It comes from Hawaii via The Maui News, June 21st. The story is that three nonprofit mental health and substance abuse agencies on the island of Maui announced a merger of their organizations—Maui Youth and Family Services (www.myfs.org), Malama Family Recovery Center, and Aloha House (www.aloha-house.org). According to Jud Cunningham, the CEO-to-be of the combined organization, the organizations are consolidating because, “it will make us stronger.”

A lot of their merger story is ordinary. Their motivations for a merger were quite typical. They wanted to improve back-office services, create seamless services for their clients, and grow their services. As with other mergers, they combined all three boards into one entity and selected Peter Cahill, the former chairman of the MYFA Board, to lead the consolidated governing structure. Then the board selected one staff leader, Jud Cunningham from Aloha House, to be the CEO.

But this merger is different in one very interesting respect: the name. In most consolidations the nonprofits would agree to choose one name for the consolidated organization. But not in this merger. The three agencies expect to operate under their individual names.

Why would they choose to do that?

I can think of two reasons. By keeping the individual names, they are sending a message to the clients and the community that the merger has not caused any changes in the programs which they, the community, have come to rely on. In fact, the merger is careful to impact administration and governance of the programs without altering the individual programs themselves. Unless they have been paying close attention to the news, most people in the community will have no idea that a merger has occurred at all. And that is ideal from a client perspective.

Another reason to for keeping separate identities is to disassociate the varying program types from each other. Clients of a family agency may not want to integrate their children into a nonprofit which provides addiction treatment services to adults. By maintaining separate identities and separate program locations, the community does not need to be concerned that the client populations will be consolidated into a single organization or location. With this, the consolidation can proceed uninterrupted in the areas where it needs to the most: administration and governance.

It will be interesting to see how this strategy of keeping the three names works in the future. If you are aware of a merger that has kept separate identities, write and let me know about how it has worked out.

Jean Butzen, a consultant with Mission Plus Strategy, specializes in mergers and alliances in the Chicago area.

Posted by Kelsey Walker

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