http://www.ssireview.org/articles/ Strategies, Tools, and Ideas for Nonprofits, Foundations, and Socially Responsible Businesses en nicholas_jenna@gsb.stanford.edu Copyright 2010 2010-02-24T07:00:54+00:00 http://www.ssireview.org/articles/entry/merging_wisely/ http://www.ssireview.org/articles/entry/merging_wisely/ In the midst of the worldwide financial crisis, funders are increasingly suggesting that nonprofits consider merging—that is, fusing their boards, management, and legal entities to form a single organization. In 2009 alone, my consulting firm delivered nearly 60 presentations and workshops on mergers and other partnership forms to more than 6,000 participants—double the previous year’s tally. Similarly, our strategic restructuring practice (which handles mergers and other partnerships) grew 60 percent last year, during the worst part of the recession. Now 2010 is upon us, and the urge to merge shows no signs of abating. Underlying this trend are two core beliefs: The nonprofit sector has too many organizations, and most nonprofits are too small and are therefore inefficient. Mergers, the thinking goes, would reduce the intense competition for scarce funding. Consolidating organizations would also introduce economies of scale to the sector, increasing efficiency and improving effectiveness. Yet a closer look at the nonprofit sector suggests that this thinking is too simplistic. Mergers are risky business. They sometimes fail, although not so frequently as in the corporate world. They usually cost more than anticipated. They sometimes create more problems than they solve. And the problems that they allegedly solve—too many nonprofits,… Nonprofit Management, Philanthropy, Responsible Investing 2010-02-25T20:56:12+00:00 http://www.ssireview.org/articles/entry/whats_next_bite-sized_goodness/ http://www.ssireview.org/articles/entry/whats_next_bite-sized_goodness/ In the time it takes to update your Facebook page, you could be making the world a slightly better place. That’s the idea behind The Extraordinaries, a Web-based platform for microvolunteering that’s been generating plenty of buzz since its launch last year. The goal is to harness thousands of currently untapped hours by making volunteering fast, convenient, and bite-sized. While waiting for a bus or cooling your heels at the dentist’s office, you could be using your smart phone to tag photos for the Smithsonian, send a study tip to an at-risk student, or map your local parks. “We want volunteering to be as fun and ubiquitous as playing a game,” explains Sundeep Ahuja, cofounder and president of the San Francisco-based business. The Extraordinaries (www. beextra.org) was founded by a trio with deep experience in social media. Chief technology officer Ben Rigby pioneered the use of mobile phones for youth voter registration when he founded Mobile Voter. CEO Jacob Colker was one of the first to harness Facebook to organize political campaigns. Ahuja was a product manager at MySpace before helping to launch Kiva, the microphilanthropy site. Traditional community service “has been about carving out a Saturday afternoon or an… Nonprofit Management, Philanthropy, Responsible Investing 2010-02-24T06:00:44+00:00 http://www.ssireview.org/articles/entry/research_radical_grantmaking/ http://www.ssireview.org/articles/entry/research_radical_grantmaking/ Many grants move innovators to build a better mousetrap. But what kinds of incentives inspire a better mouse? Not the short-term, project-focused, risk-averse funding of grantmakers such as the National Institutes of Health (NIH), suggests the tale of Mario Capecchi. Ignoring reviewers, Capecchi sunk his NIH grant into inventing “knockout mice,” which show what different genes do. These revolutionary rodents paved the way for thousands of medical breakthroughs, as well as a Nobel Prize for Capecchi. Funders who want to catalyze radical innovation should likewise not follow the NIH model, suggests a new study. Instead, they should emulate the Howard Hughes Medical Institute (HHMI) and make long-term grants, invest in people rather than in projects, and offer rich and frequent feedback. “If you want to encourage radical innovation, it’s not all about resources. It’s about how you spend those resources,” concludes Pierre Azoulay, an assistant professor at MIT’s Sloan School of Management and the study’s lead author. Azoulay and his colleagues followed the careers of 73 HHMI investigators and almost 500 of the nih’s most promising grantees. They found that HHMI’s investigators published more high-impact papers, cited by more of their colleagues, than did NIH grantees. Azoulay and his team… Philanthropy, Responsible Investing 2010-02-24T06:00:25+00:00 http://www.ssireview.org/articles/entry/the_case_for_stakeholder_engagement/ http://www.ssireview.org/articles/entry/the_case_for_stakeholder_engagement/ Springfield, Mass., the birthplace of basketball, was once a thriving manufacturing center producing everything from Indian motorcycles to Rolls- Royce sedans. But the wave of factory closings that began sweeping the United States in the later part of the 20th century has hit the city hard, and no one has suffered more than Springfield’s children. In 2001, at least one-third of those younger than age 9 were living in poverty, 20 percent of babies were born to teenage mothers, and students regularly ranked among the lowest academic achievers in the state. For the staff and board of the Irene E. & George A. Davis Foundation, a local grantmaker established “to improve the lives of individuals and families” in Springfield and surrounding Hampden County, the persistence of child poverty and related problems prompted a reassessment of their strategies and mission. “There was a feeling on our part that we were giving out all this money, and so what?” said Mary Walachy, executive director of the Davis Foundation. At the same time that the grantmaker was reevaluating its role in the community, national researchers were producing compelling data on brain development and the payoffs that come from investments in early childhood education.… Philanthropy, Responsible Investing 2010-02-24T06:00:18+00:00 http://www.ssireview.org/articles/entry/dashboards_that_guide_good/ http://www.ssireview.org/articles/entry/dashboards_that_guide_good/ Many nonprofit directors keep a close eye on their dashboards, those colorful arrays of output, outcome, and impact measures that represent an organization’s goals and guide its decisions. The dashboard’s brightly colored bubbles quickly signal the health of an organization’s different activities. Green dots mean, “This is going really well—no need to put more energy here.” Red dots warn, “Focus an hour of your meeting here—deep well of trouble brewing.” And yellow dots relay, “Proceed with caution.” Despite their usefulness, dashboards can create problems all their own. In a noisy and complex world, many organizations struggle to decide which indicators to include and which to leave out. Cash-strapped times and a spike in the need for nonprofit services have only muddied matters because measuring outputs, outcomes, and impacts can be expensive and time-consuming. Indeed, as the size and complexity of dashboards grow, and more and more staff members have to help with measurement, dashboards can take on a life of their own. When faced with too much information, managers may either pay attention to the wrong data or stop making databased decisions altogether. Just as staring at an odometer while driving on a winding road in a rainstorm is not… Nonprofit Management, Philanthropy, Responsible Investing 2010-02-24T06:00:05+00:00 http://www.ssireview.org/articles/entry/the_power_of_theories_of_change/ http://www.ssireview.org/articles/entry/the_power_of_theories_of_change/ The fundamental tenets of strategic philanthropy are that funders and their grantees should have clear goals, strategies based on sound theories of change, and robust methods for assessing progress toward their goals. Although these ideas are gaining traction, some prominent philanthropic thinkers continue to express reservations about how they may affect the balance of power between funders and the organizations they support. For example, former Ford Foundation president Susan Berresford expresses concerns about “funder-led strategic planning that imposes wearying and unnecessary demands on applicants and grantees,” and wistfully asks, “Has the role of the quiet, patient, and responsive funder become less appealing?” 1 She quotes the Indian social entrepreneur Sheela Patel’s complaint about funders’ imposition of logic models and their demand “that in a period of two years, we can implement perfect strategies and produce complete solutions.” Similarly, Sean Stannard-Stockton, the founder and CEO of Tactical Philanthropy Advisors and philanthropic blogger, argues that the idea of a theory of change makes sense in a “static landscape, where you can learn more and more about what works and what doesn’t and finally craft the perfect theory,” but “fails in a dynamic landscape, such as social change, where what you learned on… Nonprofit Management, Philanthropy, Responsible Investing 2010-02-24T05:59:59+00:00 http://www.ssireview.org/articles/entry/blueprint_widget/ http://www.ssireview.org/articles/entry/blueprint_widget/ Philanthropy, Responsible Investing 2010-01-27T16:32:27+00:00 http://www.ssireview.org/articles/entry/the_wrong_risks/ http://www.ssireview.org/articles/entry/the_wrong_risks/ During the early 1980s, I worked in a community center that looked after the welfare of an inner-city neighborhood in Mumbai. My clients were the poorest of the poor: pavement dwellers who lived on the sidewalks. We offered these families health services, enrolled their kids in school, and organized childcare for them. But every 15 days, public officials came and broke up their makeshift homes because it was illegal to squat on sidewalks. All we could do was give our clients a safe place to hide their belongings until the officials passed. Being young and hot-blooded, a small group of us took the local government to court. At that time, India had a chief justice of the supreme court who regarded even a postcard from a poor person as a legitimate opening to a public interest suit. And so the suit commenced with relative ease. Our small group was very excited that we might actually change the policies that kept pavement dwellers impoverished. To my surprise, however, my employer severely reprimanded me for this action and stripped away many of my discretionary powers. This organization, the Nagpada Neighborhood House, was one of the oldest and most prestigious nongovernmental organizations (NGOs)… Nonprofit Management, Philanthropy, Responsible Investing 2009-12-15T20:00:42+00:00 http://www.ssireview.org/articles/entry/endowment_for_a_rainy_day/ http://www.ssireview.org/articles/entry/endowment_for_a_rainy_day/ Judging from media accounts, U.S. nonprofits are facing unprecedented, if not catastrophic, financial distress because of endowment losses. Hiring is being frozen, facility maintenance is being deferred, programs are being dropped, performance seasons are being shortened, and construction projects are being cut back or even halted. As the president of Harvard University, Drew Gilpin Faust, put it when defending her decision to sharply reduce expenditures following a 30 percent drop in the value of the school’s endowment, “Tinkering around the edges will not be enough.” Harvard isn’t the only institution making dramatic cuts in response to a falling endowment. The J. Paul Getty Trust, which runs the J. Paul Getty Museum in Los Angeles, slashed 14 percent of its workforce and delayed exhibitions and acquisitions after its endowment fell from $6.4 billion to $4.2 billion. Yale University cut capital expenditures by $2 billion and staff salaries and benefits by 7.5 percent after its endowment fell from about $23 billion to about $16 billion. And the Shriners Hospitals for Children considered closing 6 of its 22 children’s hospitals after its endowment fell from $8.3 billion to $5.0 billion. The Shriners tabled that motion, but are considering billing insurance and Medicaid for… Nonprofit Management, Philanthropy, Responsible Investing 2009-12-01T22:36:55+00:00 http://www.ssireview.org/articles/entry/qa_jeff_raikes/ http://www.ssireview.org/articles/entry/qa_jeff_raikes/ Jeff Raikes grew up on his family’s 3,000-acre farm near Ashland, Neb. He learned to drive a tractor at age 7, and by age 9 he was working evenings and weekends in the cornfields. He left Nebraska for Stanford University, planning to pursue a career in agricultural policy. Bitten by the hightech bug, Raikes stayed in Silicon Valley after graduation and joined Apple Computer. After a two-year stint working for Steve Jobs, Raikes ventured north to join Bill Gates at Microsoft. Over the next 28 years Raikes led many important tasks, eventually becoming one of the software giant’s top executives. Last fall, Raikes was named CEO of the Bill & Melinda Gates Foundation. Raikes didn’t have much experience in philanthropy, but he did have Bill Gates’ trust. And when you are in charge of spending several Jeff Raikes takes over the Gates Foundation at a turbulent time when philanthropic resources are down and social needs are up. billion dollars of the Gateses’ money each year, it is essential to have that trust. In this interview with Stanford Social Innovation Review Managing Editor Eric Nee, Raikes discusses the reasons that Bill and Melinda Gates selected him to lead their foundation. He… Philanthropy, Responsible Investing 2009-11-18T06:00:00+00:00